Impact of Economic Downturn on FCPL

As I’m sure you are aware, COVID19 is having a significant impact on the economy.  It will also have an impact on the library’s funding and budget.  We will not know the full situation for some time, but we are beginning to receive preliminary information. 

Most staff will not notice a difference in funding for the rest of Fiscal Year 2020, which ends June 30, 2020.  We do not expect a reduction in funding from the County or State during this time.  We have already seen a significant decrease in fines and fees revenue due to our closure and extension of materials due dates, but this is offset by personnel savings due to vacant positions that have remained unfilled.  We’ve seen decreased expenses in some areas (e.g., program performers, branch supplies) and increased expenses in other areas (e.g., COVID19-related supplies).

We will feel the impact in Fiscal Year 2021 (FY2021) as our funding entities experience significantly reduced revenues.  Our FY2021 budgeted revenues are as follows:

Forsyth County        $   7,047,912

State of Georgia      $      489,173

Self-generated         $      243,000

Donations                $        50,700

Federal                   $        25,620

Total                       $   7,856,405

At almost 90% of our revenues, our primary concern is funding from Forsyth County.  The good news is that we do not expect significant reductions from Forsyth County next fiscal year.  Nikki and I have been monitoring this closely by talking with the County Manager and watching Board of Commission meetings.  Property tax revenues will not change in the first year of an economic downturn (unless there is a spike in delinquent accounts) and local option sales tax (LOST) is being collected on all the extra groceries and supplies residents are purchasing.  However, I am not optimistic about our request for a funding increase (new positions, salary study implementation, pay increases) submitted earlier this year. 

The FY2021 State funding situation is more serious, as sales tax and income taxes plummet.  All state agencies, including the Georgia Public Library Service (GPLS), have been instructed to resubmit their budgets with a 14% reduction of their base FY2020 budget.  This does not necessarily mean FCPL will receive a 14% reduction; our reduction might be less or it might be more.  This will depend on how GPLS distributes the reductions (e.g., by number of counties served or by population).  This reduction will most likely impact our Materials budget.  Depending on the severity of the reduction, we may need to apply more County funding to Materials and decrease County funding for Personnel and Operations. (Our three budget categories are Personnel, Materials, and Operations.)  We have State benefits and will also be impacted by funding reductions to the Department of Community Health, which represents 13% of the State budget.

Assuming we have a decreased level of circulation and in-branch activity (as compared to a pre-COVID19 year), our self-generated revenue will be under budget.  Donations will also be down, as the Friends bookstore revenue will decrease.

Decreases in revenues must result in decreases in expenses.  We may need to leave vacant positions unfilled, postpone equipment replacement or maintenance, and reduce spending on materials.  We will look for anything in the budget that can be temporarily eliminated or postponed.  The good news is that we are entering this economic downturn with a strong infrastructure.   As so many Public Services and other staff have developed creative solutions to serving the public during our closure, Support Services and your administrative team will find creative solutions to budget issues and work to minimize the impact on staff.  We survived the Great Recession and we will survive this.