Fund Balance Policy
It is an established principle that, as determined by the Tinley Park Public Library Board of Trustees, a portion of the incremental revenue greater than expenses in any given year may, at the discretion of the Board, be set aside for maintaining reserves.
The Tinley Park Public Library Board of Trustees shall establish sufficient reserves as required when needed to comply with the covenants, terms, and conditions associated with debt instruments used to finance capital projects.
General Operating Fund
The Tinley Park Public Library is dependent upon property taxes to provide the funds necessary for operations. Property taxes for Cook and Will Counties are paid at different times, and as such, the tax revenues are not received equally throughout the year corresponding to Library operating expenses.
An unreserved fund balance shall be maintained sufficient to handle emergency needs, cash flow needs associated with the timing of property tax receipts, State distributive revenues, and unfavorable variances in the annual budget.
The Tinley Park Public Library shall maintain an unreserved fund balance in the General Operating Fund sufficient to cover the greater of the following:
a) 67% of the most recently approved annual budget expenditures as a whole; or
b) eight (8) months of operations which considers that expenses are not all incurred equally throughout the operating year.
Amounts determined above shall be considered a minimum balance requirement.
Amounts greater than the above requirements may be considered by the Tinley Park Public Library Board of Trustees for potential transfer to the Capital Reserve Fund for support of the Capital Improvement Plan, or such other reserve funds the Board of Trustees may designate from time to time.
Should the unreserved fund balance fall below the requirements a) or b) above, it should be replenished as soon as practical to the desired minimum threshold.
Capital Reserve Fund
The key principle in establishing capital replacement reserves is that funds shall be segregated and accumulated over time to support the repair or replacement of existing capital assets or to support anticipated needs that will be required in the future.
The Board of Trustees have heretofore established a Capital Reserve fund to accumulate funds anticipated to be required to maintain or improve the Library’s building and grounds, equipment, and other infrastructure, or to support future additions or expansions.
Debt Service Fund
This fund is established for expenditures related to the payment of principal and interest on bonds issued by the Village of Tinley Park. Any balance in this fund is restricted solely for the purpose of paying debt service. However, any fund balance remaining once issued bonds have been fully retired may be retained in anticipation of future debt payments or transferred to the Capital Reserve Fund at the direction of the Board of Trustees.
Working Cash Fund
State statutes provide guidance for a Public Library to levy amounts to establish a Working Cash Fund intended to be a reserve to provide needed cash flow to support operations between receipt of property tax revenues.
Should the Working Cash Fund be drawn upon during the year, it will be replenished to its established limits when the next property tax distributions are received.
Tinley Park Public Library has heretofore levied the allowable amounts to establish its Working Cash Fund. Any investment earnings (interest) on unused funds will be retained within the fund to allow this resource to increase modestly over time.
Transfer of Funds
In conjunction with the approval of the annual budget for the Tinley Park Public Library, or at other times as deemed appropriate, the Board of Trustees may approve the transfer of funds not required to meet the reserve requirements established for the General Operating Fund to the Capital Reserve Fund, Debt Service Fund, or such other reserve funds that may be established by the Board from time to time. Such transfers shall be documented in the form of a resolution.
Board Approved: 06/22/22