Proposed 2026-27 Budget

Overall Budget Summary

The Proposed Budget recommends total appropriations of $9,277,375, funded entirely by revenues of $10,333,412, and a reversion to fund balance of $1,056,037.

The Proposed Budget decreases total expenses by $571,519, primarily due to a $453,338 decrease in professional services that include Maintenance of Effort (MOE) contributions, a $50,555 decrease in cost plan charges, and a $67,626 decrease in property insurance. In addition, the County Library Fund increases its transfer to the Library Capital Fund by $500,000 to support capital improvements.

Total revenues increase by $929,066, primarily due to an $885,480 increase in current secured property tax revenues. While overall revenues increase and total expenses decrease, changes in MOE contribution levels continue to shift the composition of expenses within the fund and may impact the availability of resources for discretionary uses.

Maintenance of Effort (MOE) Contributions: Maintenance of Effort (MOE) contributions continue to increase following [SS1.1]the Fifth Amendment to the Joint Exercise of Powers Agreement governing the Library Financing Authority (LFA). In Fiscal Year (FY) 2025-26, total MOE contributions are approximately $11.1 million, increasing to an estimated $12,258,391 in FY 2026-27, including a $633,571 increase from the County Library Fund and a $487,764 increase from the City of Santa Cruz, while the City of Watsonville contribution remains unchanged. Although total MOE obligations are increasing, the County Library Fund’s budgeted contribution in the Proposed Budget is lower than the prior year Adopted Budget, reflecting prior-year estimates and timing adjustments. Higher MOE contribution requirements increase the share of required expenses within the County Library Fund, reducing flexibility to fund capital improvements, collections, and other discretionary service enhancements. In future years, continued growth in MOE obligations may create ongoing structural constraints within the fund and, without proportional revenue growth, may limit the Library’s ability to expand services, address facility needs, or respond to changing community demand.