I am writing to respond to the letter from Mr. Steven Schlussel that appeared in the April 8 issue of The Port Washington News regarding the library's 2005 budget. I have been a trustee of the library for the last four years. I realize that by the time this letter appears in print the outcome of the vote on the library's 2005 budget will have been decided. I believe that certain of the points in Mr. Schlussel's letter require further elaboration, however.
Mr. Schlussell characterizes the difference between the 2004 budget and the proposed 2005 budget - which he calculates to be "$300,000 plus" - as "fat." The proposed 2005 budget is $260,000 more than the 2004 budget, which equals a 4.74 percent increase to the 2004 budget. There are two primary drivers for this increase: the library's mandatory contribution to the New York State Retirement system and health insurance premiums. The library's mandatory contributions to the New York State Retirement System have increased from $16,000 in 2002 to an estimated $306,000 in the proposed 2005 budget. Over 40 percent of the $260,000 increase in the proposed 2005 budget can be attributed to this mandatory contribution to the retirement system. The library exercises no control over determining the amount of its mandatory contribution. The library will, however, be obligated to pay its mandatory contribution to the New York State Retirement System whether or not the 2005 library budget is approved by voters. Another 35 percent of the $260,000 budgeted increase can be attributed to other employee benefits, most notably health insurance premiums. Here again, the library will be required to meet its obligations under its employee benefit plans regardless of whether the budgeted increase is approved by voters. After accounting for these two items, the remaining budgeted increase is $60,000, or a one percent increase over the 2004 budget.
Mr. Schlussel states in his letter that over budgeting routinely results in surplus funds in excess of $300,000. In fact, at the end of the library's 2003 fiscal year the surplus amount was $176,200 and it is projected to be $190,900 at the end of this fiscal year (June 30). In each of these years, the library board of trustees has voted to appropriate $50,000 of these surplus amounts for the following year's budget thus reducing the surplus amounts at the beginning of each fiscal year. Moreover, it should be noted that the library has been advised by its auditors that maintaining a surplus fund in the range of 5 to 10 percent of the library's budget, while not necessary, would be considered a prudent practice. After taking into account the $50,000 of surplus funds to be appropriated toward the 2005 budget, the surplus amount heading into fiscal year 2005 will be $140,900 or roughly 2 1/2 percent of the proposed 2005 budget.
I hope that the public will find these additional facts illuminating. All of the budget information contained in this letter has been publicly available at the library since its first budget hearing on March 3.
Mary P. Breen
Trustee, Port Washington Library