Boulder library model projects operating deficit in 2027, fund balance depletion by 2030

A Boulder Public Library District financial model projects an operating deficit beginning in 2027 and a potentially negative fund balance around 2030 if current spending patterns continue.

The model was presented at the district board’s Aug. 23 retreat as a planning tool, not a precise prediction. Under its baseline “do nothing” scenario, 2027 revenue is projected at about $20.1 million, with expenses exceeding that amount. The model then shows the fund balance declining in subsequent years. The retreat recording does not include a complete year-by-year table of revenue, expenses or fund-balance projections.

The model assumes annual revenue growth of about 3.15%, below the district’s historical assumption of roughly 4% or more. Staff cited weaker property-value growth, changes in state assessment laws and exemptions, mortgage rates, economic conditions, delinquent or abated taxes and appeals as pressures on property-tax revenue. The model projects another decline in 2027, followed by slight growth beginning in 2028.

Personnel costs account for about 63% of the current budget, while non-personnel operating costs make up about 26%. The model assumes annual wage increases of 3%, a 15% increase in health-benefit costs in 2027 and an employer contribution to the state pension system equal to 16.68% of salaries. Staff said the district does not control the pension contribution rate. The model also includes capital needs, technology replacements and deferred facility work, while excluding grant-funded activity.

Staff described the district’s end-of-2025 fund balance as about $7.4 million, including roughly $3.1 million identified as capital and other reserves. The retreat discussion did not establish how much of the remaining balance is unrestricted, committed or otherwise available for general spending, nor did it provide a clean figure for money already committed through vendors, contractors and purchase orders. A formal fund-balance schedule would be needed to determine the amount available for operations.

Trustees reviewed staffing-reduction scenarios of 10%, 15%, 18% and 20%, but adopted none. Staff estimated that a 10% reduction would represent about 22 positions; the 18% scenario was described as roughly 25 to 27 positions. The transcript does not provide reliable head counts for the 15% or 20% scenarios.

Under the model, the 10% scenario would still draw about $3 million from the fund balance through 2030. Staff said the 15% scenario would avoid using the balance in 2027 but draw on it in 2028 because of capital needs. The 18% scenario was described as the first modeled option that avoided projected fund-balance drawdown under the model’s assumptions.

The percentages are not adopted staffing plans. Trustees discussed attrition, early-retirement or separation incentives, leaving vacancies unfilled, layoffs, furloughs, changes to holiday schedules, program reductions, changes in operating hours, greater use of community partners and technology, and possible program discontinuations. The discussion did not assign cuts to particular branches, departments, positions, programs or hours. Staff cautioned that voluntary departures might not occur in the positions the district wants to eliminate, and that layoffs or restructuring could require labor negotiations.

The model may change as the district receives updated assessed-property values. Staff expected preliminary information from the Boulder County assessor Aug. 25, with additional estimates in September and October and final figures in December. Labor negotiations were expected to begin Sept. 6. The 2027 budget was expected to return to the board in October, with final approval due at the first meeting in December. Those are scheduled milestones; the board did not select a staffing-reduction percentage or approve specific service cuts at the retreat.