Financial Policies

The San Miguel County Public Library “the Library” adopts the following Financial Policies.

The Purpose of Financial Policies is:

to clarify strategic intent for financial management
to promote long-term strategic thinking
to institutionalize good financial management practices that define boundaries
to comply with established public management best practices
to support good bond ratings and to manage risks to financial condition

FINANCIAL PLANNING POLICIES

Financial Plan

The annual budget is the financial plan for the operation of the Library. It provides the framework for both expenditures and revenues for the year and translates the priorities into financial terms of the Library. The annual budget will follow all statutory requirements as stipulated in the Colorado Local Government Budget Law, Section 29-1-101 et seq., C.R.S. It will be compiled to include recommended GAAP (Generally Accepted Accounting Principles) and GASB (Governmental Accounting Standards Board) standards for budget preparation and presentation.

The budget shall be presented in a summary format intended for a general audience. The budget format shall itemize expenditures and revenues of the Library by fund. It shall describe the expenditures and revenues and show the amount budgeted for the current fiscal year and the amount budgeted for the ensuing fiscal year.

The development, presentation, and administration of the annual budget is the responsibility of the Library Director. The process begins in August with the final budget approved by the Board in December prior to the deadline established by the State of Colorado. The proposed budget will be available for public viewing and two public hearings will be conducted prior to approval in December.

The Board of Trustees may amend the annual budget by resolution to make budget transfers from fund to fund , following statutory guidelines, after proper notice of public hearing to amend the annual budget. The Library Director may authorize budget transfers within a fund during the budget year; or upon direction of the Board of Trustees, may complete approved transfers from the General Fund to the Capital Fund as presented in the approved annual budget.

Goals and Objectives

The Library’s annual budget process involves incorporating the Outcomes, goals and strategies as developed by the Library’s Board of Trustees’ to provide for the community’s highest priority needs. Strategic planning begins with determining the Library’s fiscal capacity based upon long-term financial forecasts of recurring available revenues.

Budgetary Structure

Basis of Budget

State law requires budgets for s governmental fund types. Budgets for the Library’s funds are adopted on a basis consistent with Generally Accepted Accounting Principles (GAAP—uniform, minimum standards and guidelines for financial accounting and reporting which encompass the conventions, rules and procedures necessary to define accepted accounting practice at a particular time.) The Library has no exceptions to this standard and uses modified accrual; the same as our basis of accounting.

Major Governmental Funds

Any fund whose revenues or expenditures, excluding other financing sources and uses, constitute more than 10% of the revenues or expenditures of the appropriated budget should be considered a major fund. The library reports the following major funds.

General Fund: This is the Library’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The operating budget includes ongoing expenditures associated with the delivery of programs and services. Costs include those for administration, operations, and capital transfers.
Bond Fund: This fund when necessary is used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs, if any.
Capital Reserve Fund: This fund is used to account for the accumulation of resources for approved capital expenditures. The capital budget represents expenditures for items that have a useful life in excess of two years and are not consumed when used. The capital budget is based on the comprehensive plan for capital improvements with projections of up to five years.

Non Major Governmental Funds

Debt Assistance Fund: This fund is used to account for the proceeds of specific revenue sources (sale of previous library facility) that are designated to assist with the repayment obligation on the debt incurred to obtain the current facility or to assist with the accumulation of resources for approved capital expenditures. This fund was retired in 2017 and is no longer active.
Special Donations Revenue Fund: This fund is used to account for the proceeds of donor and grant revenues. The purpose of the fund is to promote reading, literacy, accessibility to information and life-long learning by securing funding from the private sector to support the Library’s programs, services and facilities above and beyond what is provided through traditional public funding. The balance of this fund is held in the General Fund reserves because it is not currently material.

Basis of Accounting

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Library considers revenues to be available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, grant revenue, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the Library.

Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. An exception to this general rule is principal and interest on long-term debt which is recognized when due.

Fund Balance Reporting

The term, fund balance, describes the difference between the assets and liabilities reported in a governmental fund and also approximates the measure of liquidity or amount of working capital of a fund. To conform to GASB Statement No. 54, fund balance for governmental funds should be reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. There are five components of fund balance:

Non-spendable Fund Balance: The non-spendable fund balance classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.
- Assets that will never convert to cash (e.g., prepaid items and inventories of supplies);
- Assets that will not convert to cash soon enough to affect the current period (e.g., the long-term portion of loans receivable and non-financial assets held for resale, such as foreclosure properties); and
- Resources that must be maintained intact pursuant to legal or contractual requirements (e.g., the principal of an endowment or the capital of a revolving loan fund).
Restricted Fund Balance: Fund balance should be reported as restricted when constraints placed on the use of resources are either:
a. Externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or
b. Imposed by law through constitutional provisions or enabling legislation. Likewise, a government’s own constitution or charter also may impose legal restrictions on the use of resources reported in a governmental fund. Example: Taxpayer’s Bill of Rights (TABOR), Article X, Section 20, Colorado Constitution; requires 3% of fiscal year
spending held as a reserve.
Committed Fund Balance: Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision-making authority (normally the governing body) should be reported as committed fund balance. Those committed amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of action (for example, legislation, resolution, ordinance) it employed to previously commit those amounts. The authorization specifying the purposes for which amounts can be used should have the consent of both the legislative and executive branches of the government, if applicable. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.
Assigned Fund Balance: The term assigned fund balance is used to describe the portion of fund balance that reflects a government’s intended use of resources. Such intent would need to be established at either the highest level of decision making, or by a body (e.g., finance committee) or an official designated for that purpose. Amounts in excess of non-spendable, restricted, and committed fund balance in funds other than the general fund automatically would be reported as assigned fund balance. This category may also be used to reflect the appropriation of a portion of existing fund balance to eliminate a projected deficit in the subsequent year’s budget.
Unassigned Fund Balance: The general fund, as the principal operating fund of the government, often will have net resources in excess of what can properly be classified in one of the four previous categories. If so, that surplus is presented as unassigned fund balance.

General Fund Reserve Policy

The General Fund is the main operating fund that pays for general services provided by the Library. The General Fund accounts for all general revenues of the Library and for expenditures related to the delivery of the Library’s general services.

The General Fund Reserve Policy incorporates the requirements of the Library and is consistent with the Library Board of Trustees policies regarding the use of one-time and ongoing sources of revenue to fund Library services.

The Library’s General Fund Reserves shall be comprised of three separate Reserves. These Reserves will be considered together when calculating the total General Fund Reserve balance.

Emergency Reserve
An Emergency Reserve will be maintained for the purpose of sustaining General Fund operations in the case of a public emergency such as a natural disaster or other unforeseen catastrophic event. The Emergency Reserve will not be accessed to meet operating shortfalls or to fund new programs or personnel. This reserve may be expended only if it meets the state’s (TABOR) law.
Budget Stabilization Reserve
Funds reserved under this category shall be used to mitigate, should they occur, annual budget revenue shortfalls (actual revenues less than projected revenues) due to changes in the economic environment and/or one-time expenditures that will result in future efficiencies and/or budgetary savings. Examples of “economic triggers” and one-time uses include, but are not limited to:
- Significant decrease in property tax, or other economically sensitive revenues;
- Reductions in revenue due to actions by the state/federal government;
- Short-term cash shortfalls using reserves as working capital instead of debt;
- One-time maintenance of service levels due to significant economic/budget constraints; and
- One-time transitional costs associated with organizational restructuring to secure long-term personnel cost savings.
Special Donations Revenue Fund
The balance of this fund is held in the General Fund reserves because it is not currently material.

General Fund Reserve Calculation and Replenishment

Total General Fund Reserves consist of the total of the Emergency Reserve and the Budget Stabilization Reserve plus the Special Donations Revenue Fund balance. The target level for total General Fund Reserves shall be 30% of the current year’s budgeted expenditures. A review of the General Fund Reserve and transfers to the Capital Fund are part of the annual budgeting process. Emergency Reserve shall be set at a target level of 3%, and the Stability Reserve shall be set at a target level of 27%. The balance of the Special Donations Revenue Fund varies year to year.

At the beginning of each fiscal year, the fund balance will be calculated and a transfer made to the Capital Building Reserve Fund to replenish or adjust the General Fund fund balance to equal the targeted ending fund balance in the current year’s budget.

Excess Equity

On an annual basis, after the year-end audit has been completed, the Library Director shall produce a schedule of all fund balances, with projections of reserve requirements and a plan, if any for the use of excess equity for the current year.

Any excess equity (defined as funds above the 30% target plus a 5% contingency) realized in the General Fund at year-end shall be used first to meet reserve policies as set forth in the annual budget for the following year. Excess equity may be used for the following purposes:

Capital Improvement Plan reserve
Cash Payment for Capital Improvement Projects
Retirement or Refinancing of Existing Debt
Emergency purposes

Excess Equity is most commonly a non-recurring source of revenue. Recommendations for the use of Excess Equity may be brought forward by the Library Director and will require approval by a majority of the Board of Trustees.

Balanced Budget

The Library will strive to pay for all current operating expenditures with current operating revenues. The Library relies heavily on property tax revenues which can fluctuate every two years at re-evaluation. The Library will not practice deficit spending as a normal course of business. Expenditures including contingencies will not exceed revenues plus fund balances.

The Library will not spend in excess of the annual appropriation for each fund. If the expenditures increase beyond the budgeted estimates, then formal action should be taken to increase the appropriation to cover the increased expenditures. The formal action to amend the budget will require notification and a hearing where the reasons for the increased appropriation will be discussed with consideration of public input.

Long-Range Planning

Each year, staff shall review the long-term financial plan that forecasts operating expenditures and revenue for the next three to five years and capital expenditures for the next five years.

The long-term financial plan will be updated prior to the start of the annual budget process and incorporate the Board of Trustees’ Outcomes.

Property Tax Rates

Each year the Library Director will check-in with the County Assessor to determine if the Property Assessment Rates will change, and report that to the Finance Committee. Also, the Library Director will monitor legislation and ballot initiatives to determine if there are proposed changes to Property Tax Assessment Rates. By the end of August each year the Library will receive an estimate of Equalized Assessed Value for the Library District. Upon receipt of this estimate, the Library Director can determine estimated revenues for the following budget year. The Library Director will share this EAV with the Finance Committee.

The Library Director will present to the Finance Committee a projection of revenue which will include meaningful analysis of long-term trends and projections of revenues, expenditure, debt, and non-current liabilities in order to uncover potential long-term imbalances. This analysis will then become the basis for action by management and trustees. Alternative strategies needed to address these issues, if needed, will be identified.

Review of Compensation and Job Classification

Every three years, the Library Director will conduct a job classification and compensation study using information from the Employer’s Council, the State Library Library Research Service and regional employers to develop appropriate market ranges for each position. The study should include a review of job descriptions, job classifications, wages and benefits to determine whether adjustments are necessary relative to comparable positions in comparable organizations and geographic areas.

Capital Building Reserve Fund Reserve Policy

The Capital Building Reserve Fund balance will have a targeted minimum balance of $600,000 that will strive to cover major capital building improvements such as a roof replacement, elevator, snow melt system, etc. and flexible monies reserved for general operating expenditures if needed. The amount in the capital fund greater than this minimum reserve will be available each budget year for non-major capital improvements.

5 Year Capital Improvement Plan

Capital Improvement Policies

The Library will annually prepare and approve a Capital Improvement Plan (CIP) during its annual budget process. The plan will forecast estimated costs of future major (if known) and non-major capital improvements for the next five years, such as building repairs, technology updates or future branch expansion.

The Library will enact an annual capital budget based on the multi-year CIP.

The CIP will also coincide with the Long Range Strategic Plan in that it will fund the long term capital goals. Short term program goals of the plan may be funded by the operating budget or the capital budget.

The Library will coordinate development of the capital improvement budget with development of the operating budget. Future operating costs associated with new capital improvements will be projected and included in the operating budget forecasts.

The Library will maintain all its assets at a level adequate to protect the Library’s capital interest and to minimize maintenance and replacement costs.

The Library will determine the least costly financing method for all new projects.

Asset Management

Inventory

Capital improvements, equipment, computers, furniture, and facility projects shall be capitalized if their useful life is greater than two years, are at least $5,000 each and not consumed when used. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend the assets’ lives are not capitalized. Collection items are depreciated regardless of cost. Donated fixed assets are recorded at their estimated fair value at the date of donation.

The Library calculates depreciation using the straight-line method over the estimated useful lives. The estimated useful lives are as follows:

Books and other collection items 3 – 5 years
Furniture and Equipment 3 – 10 years
Buildings & Infrastructure 25 – 40 years

Annually, fixed assets with a value of at least $5,000 each will be physically verified by staff and corrections or changes made on the inventory sheets. This updated inventory will then be given to the auditor.

Insurance

The Library is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Library carries general property and liability insurance for the building and Directors and Officers insurance to cover the volunteer Board of Trustees and Library Director. The Library also carries insurance for other risks including workers compensation insurance.

REVENUE POLICIES

The Library will estimate its annual revenues by an objective, analytical process, wherever practical. The Library will project revenues for the next year and will update this projection annually. Each existing and potential revenue source will be reexamined annually.

In 1999, the Library obtained voter approval to collect and retain all property tax revenues derived from a 2.80 mill levy. In addition to the 2.80 voter-approved mill levy, in 2019 the Library obtained voter approval to collect and retain $630,000 annually by the necessary mill levy to achieve that amount, as well as any additional revenues for increases based on inflation and annual local growth calculated each year.

Property taxes levied in the current year and collected in the following year are reported as a receivable at December 31, net of an estimated uncollectible portion. Any uncollected property taxes will be re-levied in the following year, if material.

The Library will apply grant resources first to fund programs and then apply unrestricted net assets available to finance the balance of the program. Under the terms of grant agreements, the Library funds certain programs by a combination of specific cost-reimbursement grants and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program.

One-time revenues shall only be used to cover one-time costs and ongoing revenues shall only be used to cover ongoing costs.

The Library may budget for inter fund transactions. Funds may be transferred from one fund to support expenditures of other funds in accordance with the authority established for the individual fund.

Investment Policy

SCOPE:
This investment policy applies to activities of the Library with regard to investing the financial assets of the Library.
OBJECTIVES:
Funds of the Library will be invested in accordance with this policy and Colorado Revised Statutes (C.R.S.) § 24- 75-601. The Library’s investment portfolio shall be managed in a manner to attain a market rate of return throughout budgetary and economic cycles while preserving and protecting capital in the overall portfolio. Investments shall be based on statutory constraints. The primary investment criteria in priority sequence are safety, liquidity and yield. The investment portfolio shall be invested in such a way as to reflect socially responsible investment values and local considerations, as determined by the Board of Trustees.
DELEGATION OF AUTHORITY:
The Library Director or designee shall be the “Investment Officer” responsible for investment activities with agreement from the Library Board’s Finance Committee. The Investment Officer shall operate the investment management program consistent with this policy. In order to optimize total return through vigilant portfolio management, resources shall be allocated to the investment management program.
PRUDENCE:
A. The standard of prudence to be applied by the Investment Officer shall be the “prudent investor” rule, which states, “Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.” The prudent investor rule shall be applied in the context of managing the overall portfolio.
B. The Investment Officer, acting in accordance with this policy and exercising due diligence, shall not be personally responsible for a specific security’s credit risk or market price changes.
MONITORING AND ADJUSTING THE PORTFOLIO:
The contents of the portfolio shall be presented to the Board of Trustees for review quarterly as an investment report.
INTERNAL CONTROLS:
The Investment Officer shall organize, control, and make decisions relating to cash
flow needs and investment opportunities. The Custodian (financial institution or broker chosen by the Library) shall receive copies of the confirmations and all securities to be held in safekeeping except those held by the Federal Reserve. Transfers made for investments may be made only to qualified institutions listed in item number XI. Money held in SEC Registered money market funds must comply with § 24-75-601 C.R.S. Money held in state pools must comply with § 24-75-701 C.R.S. Other controls may be adopted to prevent loss of public funds due to fraud, error, misrepresentation, unanticipated market changes or imprudent actions.
SHORT AND LONG TERM PORTFOLIO DIVERSIFICATION:
A. All investments will be considered short-term (less than one year) or long-term (one to five years). Duration should be chosen by the Investment Officer to meet the objectives for cash flows set forth in the Long Range Strategic Plan and Budget.
B. All investments will be made in accordance with the Colorado Revised Statutes, which include the following: § 30-10-708 C.R.S., Deposit of funds in banks and savings and loan associations; § 11- 10.5-101 C.R.S., et. seq. Public Deposit Protection Act; § 24-75-601 C.R.S., et. seq. Funds – Legal Investments; § 24-75-603 C.R.S., Depositories; and § 24-75-702 C.R.S., Local governments – authority to pool surplus funds. Any revisions or extensions of these sections of the statutes will be considered to be part of this Investment Policy immediately upon the effective date following enactment.
C. Short-term investment maturities for all funds shall be scheduled to coincide with projected cash flow needs. No long-term investments shall exceed 5 years without approval by the Board of Trustees.
LONG TERM PORTFOLIO DIVERSIFICATION:
Instruments and diversification for the long-term portfolio shall be the same as for the short-term portfolio. Maturity scheduling shall be timed according to anticipated need. For example, investment of building construction funds shall be timed to meet contractor payments.
COMPETITIVE SELECTION OF INVESTMENT INSTRUMENTS:
A. Before the Library invests any surplus funds in fixed term investments, the Investment Officer shall obtain and record three competitive offers. If a specific maturity date is required, either for cash flow purposes or for conformance to maturity guidelines, offers will be requested for instruments which meet the maturity requirement. If no specific maturity is required, a market trend analysis, which includes a yield curve, will normally be conducted to determine which maturities would be most advantageous.
B. The Library will accept the offer that provides the highest rate of return within the maturity required and within the parameters of these policies.
QUALIFIED DEPOSITORIES AND FINANCIAL INSTITUTIONS:
A. The Library shall work from the State listing of Banking Institutions approved as depositories for its public funds which are qualified under § 24-75- 603 C.R.S., are federally insured and which collateralize deposits over the FDIC limit of $250,000 according to the Public Deposit Protection Act. The Library shall maintain cash balances with these approved depositories that are adequate to cover anticipated checks as well as any required compensating balances under bank service agreements, and such other deposits as the Investment Officer deems prudent.
B. Separate from the banking institutions approved as depositories, the Library shall maintain a listing of Financial Institutions that are approved by the Investment Officer for investment purposes. The Investment Officer shall conduct a due diligence review of the condition and the regulatory history of each Financial Institution, including state pools, prior to its approval. This review shall be accomplished by requiring financial institutions to submit a Statement of Qualification covering all officers and control persons that includes full disclosure of all information that would be required on the NASD Form U4 for Broker Dealers or the SEC Form ADV Parts 1 and 2 for Investment Advisors.
C. Prior to the approval of any Financial Institution, other than institutions approved as depositories, the Investment Officer shall require that the Financial Institution’s authorized representative assigned to the Library certify to having read and understood these investment policies and that the Financial Institution,
through its representative, agrees to comply with them or be liable under § 24-75-601.5 C.R.S.
SAFEKEEPING AND COLLATERALIZATION:
A. All fixed term investment securities purchased under this policy shall be held in third-party safekeeping by a custodial institution eligible under § 24-75- 601 C.R.S. The custodian shall issue a safekeeping receipt listing the specific instrument, rate, maturity, and other pertinent information.
B. Deposit-type securities (such as certificates of deposit) shall be collateralized as required by PDPA for any amount exceeding FDIC or FSLIC coverage. Other investments requiring collateral including repurchase agreements will be secured by the actual security held in safekeeping by a third-party custodian.
C. Money market instruments such as SEC registered money market mutual funds qualified under § 24-75-601 C.R.S. and state pools under § 24-75-701 C.R.S. shall be collateralized as required by law.
REPORTING REQUIREMENTS:
The Investment Officer shall generate monthly financial reports for management purposes. In addition, the Board of Trustees will be provided a quarterly report that will include data on investment instruments being held as well as any narrative necessary for clarification.

EXPENDITURE POLICIES

Accountability

Internal and External Financial Reporting

The Board of Trustees will be provided with monthly budget reports comparing actual versus budgeted revenue and expenditure activity. Such reports will enable the Board of Trustees to be consistently informed of the financial status of the Library. The Finance Committee reviews more detailed financial reports on a monthly basis. The Library shall establish and maintain a standard of accounting practices.

The Library will annually upload required financial and operating data to the Colorado Department of Education website. The Library will also update its website with the annual budget.

Audits

As required by the Colorado Revised Statutes, Local Government Audit Law, 29-1-601 through 29-1-608, and Library Law, 24-90-109, the Board of Trustees shall ensure that an annual audit of the financial affairs and transactions of all funds and activities of the District be conducted for each fiscal year, and that the results of the audit be distributed as described in these statutes. The audit shall be completed and the audit report submitted by the auditor to the Board of Trustees no later than June 15.

The Finance Committee working with the Library Director and Business Manager will initiate a formal Request for Proposal (RFP) process every six years, at a minimum, to acquire the services of an auditor. The committee will evaluate submitted proposals, conduct interviews if necessary, and select a certified public accountant or partnership of certified public accountants based upon the lowest and best bid.

The Board of Trustees shall annually approve the selection of a certified public accountant or partnership of certified public accounts, based on the recommendation of the Finance Committee.

Purchasing, Procurement and Cash Disbursements

1. Purpose
  This purchasing policy is intended for the internal use of the Library and its purpose is:
  1. - To provide a responsible method of accountability
    - To maintain budgetary control over purchases
    - To assure organizational efficiency
    - To secure the desired quality at the best possible cost
2. Responsibilities
  The Board of Trustees is responsible for the approval and/or revision of this policy. The Library Director or designated Person in Charge has the delegated authority to approve or disapprove purchase orders according to the guidelines stated herein, and to create procedures for efficient execution of this policy. Managers will be responsible for obtaining bids and quotations following the guidelines below. The Business Office will coordinate vendor information, ordering (if needed), and maintain an inventory of fixed capital assets.

Authorizations, Quotations, and Bids

The following guidelines apply to both routine and unusual purchases of single items, bulk quantities, aggregate purchases, and contracts for services and projects.

$ Cost Range Quotes/Bids and Purchase Order Requirements Authorization Required

$ 0 – $999.99 Manager
Expenditures of less than $100 are considered to be the equivalent of Petty Cash Requests.
Quotes and Bids not required.

$1,000 – $49,999.99 Manager and Library Director
Two Quotes/Bids if available. Purchase Order request to be submitted by Manager and approved by Library Director.

For Spending Over $50,000 (see Item 4 below, Sole Source Purchases)

$50,000 – $150,000 Manager and Library Director

Three Quotes/Bids if available. Purchase Order request to be submitted by Manager. The Library Director/Finance Committee may waive the requirement for formal bids on a case-by-case basis.

$150,000.01 and above Library Director and Board of Trustees

Published RFP. Note: Formal bidding process, RFP or proposal process as defined by C.R.S. §24-92-101 for public construction contracts for $120,000 or more (see Section 9. Construction Contracts).

Evaluation of Bids, Quotations, and Proposals

Evaluation Procedures
For purchases requiring quotes, staff may use published catalog/online prices or verbal/telephone quotes. Staff can invite RFP’s from persons, firms, or corporations. An RFP shall be published on the Library’s website and one time in the local newspaper. Staff will determine the best value by considering timing, quality, quantity, price, vendor performance, and any other relevant criteria. Staff reserve the right to reject any proposal and to accept the proposal that they deem is in the Library’s best interest. A purchase order will be awarded to the most acceptable and responsible bidder, to be judged in terms of overall suitability, e.g., quality, delivery, terms, service, and life expectancy – in addition to price and discount. Selection of specific products that have rated high in product performance evaluations may be justified as best buys for the Library. The Board of Trustees reserves the right to reject any or all bids over $25,000 and to accept the bid that appears to be in the best interests of the Library. All bids will be a matter of public record. A sole source purchase may be made if it has been determined that only one vendor is capable of meeting all specifications and purchase requirements or that it is in the Library’s best interest. Purchases may then be made on the basis of prices established by negotiation. When proposed equipment, and/or services vary to the extent that sealed bids are not practical, detailed proposals may be accepted in lieu of such bids.
State Purchase Program
The Library is eligible to purchase various commodities under the Colorado State Purchasing Program. Contracts and price agreements that have been awarded by the state are acceptable as satisfying bid and quotation requirements of the Library.
Cooperative Purchasing
The Library may participate in joint bidding and/or other cooperative purchasing ventures with other library organizations and government agencies if it is deemed in the best interests of the Library to do so.
Sole Source Purchases
A sole source purchase may be made if it has been determined that only one vendor is capable of meeting all specifications and purchase requirements or that it is in the Library’s best interest. Purchases may then be made based on processes established by negotiation. All sole source purchases must be approved by the Library Director.
Selection by Vendor
Library materials, supplies, and printing services may be bid by vendor rather than item by item. Selection of vendor will be approved annually by the Library Director and will be based on written proposals that include terms and discount rates. Contracts and price agreements that have been awarded by the state (Colorado Library Consortium – CLiC) are acceptable as satisfying bid and quotation requirements of the Library.
Professional/Personal Services
Agreements for professional or personal services, including but not limited to architectural, engineering, legal and consulting services, shall be negotiated on the basis of demonstrated competencies and qualifications at fees deemed comparable to market rates. A secondary service provider may be selected on the advice of a primary service provider, e.g., the Board attorney may recommend bond counsel; the financial advisor may recommend an appraiser. An agreement for performance of services may be extended to include a wider or expanded scope of services if the extension is within two years of the initial agreement; the fee does not exceed market rates; and the process is not in violation of any Colorado law or Constitutional regulation.
Emergency Purchase
In the event of an unforeseen emergency which requires purchases to be made immediately portions of this policy need not be applied. However, the policy will be adhered to as closely as conditions permit.
Local Vendor Preference
Independent vendors located in San Miguel County may be given a 10% price allowance in order to encourage local purchasing. When selecting an independent vendor over a national or regional vendor, all other criteria must be met in terms of quality, availability, service, etc.
Construction Contracts
C.R.S. § 32-1-1001(1)(d) requires that notices to bid must be published within the Library boundaries for all construction contracts for work or materials or both of at least $120,000. The Library may reject any and all bids, and if it appears that the Library can perform the work or secure material for less than the lowest bid, it may do so. The Library will follow all laws applicable to public construction projects as defined by C.R.S. § 24-92-101.

Banking and Cash Management

The Library ensures the safe and secure handling of monies through an efficient cash management program. Library funds will be held only by banks that insure funds through the Federal Deposit Insurance Corporation or are organized as a Government Investment Pool as defined by C.R.S. § 24-75-701.

Electronic funds transfers, direct deposits, wire transfers, and automated clearing house transactions are used whenever feasible and available.

Cash and salary advances to employees and cashing of employees’ personal checks are not allowed.

The Library Director and Business Manager are the only employees authorized to open or close a bank account on behalf of the Library.

Only an appropriate designee, i.e., an employee whose position requires the handling and depositing of monies, is authorized to make deposits into Library accounts. Such deposits include, but are not limited to, the deposit of accumulated fees, gifts, donations, grants, tax receipts, and other miscellaneous receipts.

The Library Director and Business Manager are authorized to transfer funds from one account to another account for payment of ordinary approved library expenditures.

The Library Director, Public Services Manager, Technical Services Manager and Board of Trustees are authorized signers for paper checks. All paper checks for Library goods and/or services must be signed by two authorized signers. Single checks for amounts of $5,000 or more require signatures of one Library employee and one Trustee. Individual disbursements made in any manner for amounts of $150,000 or more require approval by a Board of Trustee via email or written authorization.

Purchasing Accounts & Purchasing Cards

Purchasing Accounts (Business Office Use)
A purchasing account may be used for regular, recurring obligations of the Library (e.g., utilities, insurance, lease payments, collections items, etc.)

$0.00 – $35,000 (individually) Business Manager sets up the automatic purchasing account payments. Library Director approves initial vendor authorization.

Purchasing (Credit) Cards (Individual Use)
Purchasing cards may be issued to individuals such as managers for more efficient purchasing of materials and travel. Petty Cash cards are available to other staff for use on a non-consistent basis.

$0.00 – $150 Petty Cash Card limit per transaction.
$0.00 – $500 Petty Cash Card limit per day.

$0.00 up to $5,000 (individually) Manager monthly credit limits. Card issued in manager’s name. The limit may be increased temporarily if necessary. The Library Director approves manager purchasing card limits.

Wire Transfers

The Library needs to maintain adequate cash balances in various checking accounts in order to meet its obligations. To accomplish this, staff is required to perform wire transfers from one bank account to another on an as-needed basis. To maintain proper separation of duties and proper backup coverage, two individuals are given wire initiation privileges: The Business Manager and the Library Director. Three individuals will be given wire approval rights: The Library Director, and two Finance Committee Board representatives. Normally, the Library Director approves transactions and the trustees act in backup situations. The Business Office ensures that adequate
documentation supports each wire transfer.

Bank Reconciliations

All bank accounts and credit cards will be reconciled monthly by the Business Manager when statements become available and reviewed by the Library Director. The general operating account, investment accounts, and capital checking account bank statements are verified by the Library Director and Finance Committee monthly. The check registers for these accounts are included in the monthly Board packets.

Code of Ethics

No employee of the Library, or member of the employee’s immediate family, or firm owned by same, will be allowed to sell to the Library goods or services of any kind without the prior consent of the Library Director for expenditure over $500.

No member of the Board of Trustees, or member of the Board of Trustees’ immediate family, or firm owned by same, will be allowed to sell to the Library goods or services of any kind, at any cost, without the prior written consent of the Board of Trustees. Members of the Board of Trustees will follow all rules of conduct as outlined in C.R.S. (Colorado Revised Statutes) Title 24; Article 18.

(Excerpt: Subsection C.R.S. § 24-18-108.5.: “Rules of conduct for members of boards and commissions. (1) Proof beyond a reasonable doubt of commission of any act enumerated in this section is proof that the actor has breached his fiduciary duty. (2) A member of a board, commission, council, or committee who receives no compensation other than a per diem allowance or necessary and reasonable expenses shall not perform an official act which may have a direct economic benefit on a business or other undertaking in which such member has a direct or substantial financial interest.”)

No employee or trustee of the Library shall accept a fee, gift or other valuable item or service for personal use from any person or group of persons when such gift or other valuable item or service is given in the hope or expectation of receiving preferential treatment over others wishing to do business with the Library.

DEBT CAPACITY ISSUANCE AND MANAGEMENT

The following sets forth comprehensive guidelines for the financing of capital expenditures. It is the objective that 1) the Library obtains financing only when necessary, 2) the process for identifying the timing and amount of debt or other financing be as efficient as possible, 3) the most favorable interest rate and other related costs be obtained, and 4) when appropriate, future financial flexibility be maintained.

Conditions for Debt Issuance

The Library deems the following a list of acceptable purposes and conditions for use of
debt and permissible types of debt instruments.

Favorable market conditions
Consistent with financial limits
Bond ratings are investment grade
Help distribute costs and benefits appropriately over useful life
Project characteristics support use of debt
Project useful life meets minimum standard of 5 years
Referendum must be passed to issue general obligation bonds

Financial Limitations

Legal Debt Limit

According to the Taxpayer’s Bill of Rights, Article X, Section 20, Colorado Constitution, the limit on debt may not arise in each annual budget since it:

requires voter approval in advance for the “creation of any multiple fiscal year direct or indirect district debt or other financial obligation whatsoever…” [Tabor(4)(b)]

Exceptions are:

refinancing district bonded debt at a lower interest rate
adding new employees to the district’s pension plan
pledging adequate present cash reserves irrevocably, to be held for payment in all future fiscal years
“Debt” and “financial obligation” retain pre-TABOR case law definitions
Does not include leases with annual appropriation requirements

Restrictions on Debt Issuance

The Library will confine long-term borrowing to capital improvements or projects that cannot be financed from current revenues and/or reserves.
When the Library finances capital projects by issuing bonds, it will pay back the bonds within a period not to exceed the estimated useful life of the project.
The Library will strive to have the final maturity of general obligation bonds at, or 21
below, 25 years.
The Library will not use long-term debt for current operations.

Debt Management

The Library will maintain good communications with bond rating agencies regarding its financial condition. Every effort will be made to preserve or improve its current credit issuer rating.

The Library will follow a policy of full disclosure on every financial report and borrowing
prospectus. The Library will also comply with all continuing disclosure conditions and shall file such required documents in a timely manner.

The Library will be closed Thursday, 11/28 and Friday, 11/29 for Thanksgiving.