Finance Policy

Finance Policy

200.1 Purpose
The purpose of the Finance Policy is to set forth the basic framework for the overall fiscal management of the Cranston Public Library (hereinafter “the Library”^[1]). This policy informs the decision-making process of the Library Board of Trustees and provides guidance for budgeting, purchasing, and reporting activities.

200.2 Authority of the Board of Trustees

1. The Board of Trustees (hereinafter “The Board”) are the legal guardians and custodians of the Library and have exclusive control over all library property, buildings and grounds.^[2] [3]
2. All appropriations from the city and state, and the income of all funds belonging to the Library, shall be subject to the exclusive control of the Board.^[4] 
3. The city of Cranston shall pay, within the limits of the appropriations and other available library funds, all bills properly certified by the Board.^[5]

200.3 Annual Operating Budget

1. The Board delegates to the Library Director the responsibility for the preparation of the preliminary annual budget.
2. The Library Director and the Board’s Finance Committee reviews and revises the preliminary budget as needed.
3. The full Board approves the annual budget no later than the February meeting. The budget is then submitted to the Mayor for consideration^[6].
4. The City Council approves the annual budget as part of the overall city budget based upon the recommendation of the Mayor with input from the Board^[7].
5. The Board delegates to the Library Director the day-to-day management of library finances within the framework of the approved operating budget and board policy.
6. The Board may authorize line-item transfers within the annual operating budget.

200.4 Operating Revenue
The Library annual operating budget is supported by three revenue sources.

1. City Appropriation: This is local tax revenue appropriated by the City Council for library operations. The Library expends all local tax revenue in the fiscal year it was appropriated.
2. State Grant-in-Aid: This is dedicated library revenue that must be expended in the fiscal year the funds are received. This process is outlined in 200.7.
3. Library Generated Revenue: This includes funds generated by the Library as outlined in 200.8 and 200.12. Any residual Library generated revenue not expended at the end of the fiscal year is rolled into the Reserve Fund as outlined in 200.9.

200.5 Capital Budget

1. On an annual basis, the Library will submit a capital request to the Finance Director and the Cranston Plan Commission for inclusion in the Capital Budget and Improvement Plan^[8].
2. The Library Director will prepare a preliminary Capital Budget request for approval by the Board no later than the December meeting.
3. The Library will develop a plan for capital improvements and provide the plan for capital improvements and future library development to the Cranston Plan Commission for inclusion in the city’s comprehensive plan^[9].
4. The Board may seek voter-approved bonding authority upon approval of the City Council.^[10]

200.6 Gifts, Bequests, and Restricted Funds

1. The Board has the authority to accept any bequest, legacy, gift on behalf of and for the use of the Library.^[11] 
2. Such funds are held in a restricted gift account with the city of Cranston for exclusive use by the Library. All interest earned on these funds shall be assigned for the exclusive use of the Library. The Board can establish other restricted accounts at their discretion.
3. Restricted funds shall be spent with the approval of the Library Director, unless otherwise designated by Board policy.

200.7 State Aid to Libraries & Maintenance of Effort

A. The Library is eligible to receive state grant-in-aid in accordance with Chapter 6 of title 29 of the R.I. General Laws. The Library is eligible for municipal-based grant-in-aid and endowment-based grant-in-aid.^[12]

B. To qualify for state grant-in-aid, the city of Cranston must comply with the following maintenance of effort requirements. The city must appropriate from local tax revenues an amount not less than the amount appropriated the previous year from local tax revenues and expended for library operating expenses. The appropriation would exclude any state funds received for public library services. Any funds received from the state shall not be used to supplant funds from local tax revenues.^[13]

C. The Library must submit to the R.I. Office of Library and Information Services (OLIS) an annual report that verifies compliance with the Minimum Standards and Regulation for Rhode Island Public Libraries.^[14] Certification of compliance with the standards and regulations is executed by the Library Director and Chair of the Board.

D. The Library must submit an application for municipal-based state grant-in-aid and certification of municipal-based state grant-in-aid and local tax appropriation expenditures to OLIS. The application and certification are executed by the Finance Director, Library Director, and Chair of the Board.

E. The Library must submit an application for endowment-based state grant-in-aid and certification of endowment-based state grant-in-aid expenditures to OLIS. The application and certification are executed by the Library Director, Treasurer of the endowment(s), and Chair of the Board.

F. The Library must submit an annual disaster-preparedness and preservation plan to OLIS.^[15]

200.8 Fees

1. Under the authority of the Board, the Library may charge fees for certain services including but not limited to printing, meeting room usage, photocopies, overdue fines, and item replacement fees^[16].
2. Changes in fees are approved by the Board.^[17]        
3. The Library may charge patrons for bank fees incurred due to failed transactions.

200.9 Reserve Fund

1. The Library maintains a Reserve Fund into which unexpended library revenue is transferred at the end of the fiscal year.^[18]
2. The Trustees will authorize all spending from the Reserve Fund but may in specific cases delegate authorization to the Library Director.

200.10 Purchasing

1. The Library will follow fundamental principles of prudent procurement practices, applicable state law, and budgetary and administrative control requirements for the purchase of goods and services.
2. Although the Library is not bound by the city of Cranston purchasing regulations^[19], the expertise and procurement resources of the Cranston Purchasing Agent will be used whenever appropriate.
3. Any single purchase of $5,000^[20] or more shall be made using competitive bidding.^[21] Purchases may not be artificially split to avoid procurement thresholds.^[22] Bids of $5,000 or more and less than $10,000 will be awarded by the Library Director. Bids of $10,000 or more will be awarded by the Board.
4. In an emergency situation, the Library Director is authorized after consultation with the Board Chair to award bids of $10,000 or more. The rationale for the emergency situation must be documented and reported to the full Board at the next scheduled meeting.
5. Any single purchase of $3,000 or more and less than $5,000 shall be made on the basis of at least two written quotes.
6. The Library participates in master purchasing agreements (MPAs)^[23]. MPAs may be used in lieu of competitive bidding when applicable.
7. If mutually beneficial, the Library may purchase or contract services in conjunction with other governmental entities, including but not limited to the city of Cranston, another library, or library consortium.
8. Exemptions to this section may be made in the following instances.

1. Purchases of library books, maps, periodicals, newspaper or journal subscriptions, technical pamphlets, licenses for use of a proprietary or patented system, and services of visiting speakers, professors, and performing artists.^[24] 
2. Contracts for personal services as allowed by law.
3. Purchases of commodities or services, the price of which is fixed by a public authority authorized by law to fix rates or prices.
4. Where there is a sole source supplier as determined by the Library Director.

200.11 Audit

1. The Library is included in the annual audited financial statements of the city of Cranston and does not conduct a separate audit.

200.12 William H. Hall Free Library Trust

1. In accordance with the operating agreement between the Cranston Public Library Board of Trustees and the William H. Hall Free Library Trust (hereinafter “the Trust”). The Trust shall contribute 100% of “Net income from the endowment” to the Cranston Public Library for the maintenance and operations of the William Hall Library. “Net income from the endowment” is defined as the income from the endowment remaining after the Trust pays from the endowment income all costs of insurance, endowment management, property maintenance and improvement expenses, exterior building maintenance, repair and improvement expenses, security and all other administrative expenses of the Trust. The availability of “net income” will be reported by the Trust Treasurer to the Library on an annual basis by June 30.
2. The Library Director at the end of the fiscal year will submit a report to the Trust Treasurer of the expenditures spent operating the Hall Library during that fiscal year.

200.13 Reporting

1. The Library Director will prepare for the Board monthly financial reports^[25], and biannual restricted funds reports along with any other financial reports and data requested by the Board.

200.14 Disposition of Surplus Property

1. The Library shall give first choice for surplus property to other city departments. If an item has substantial value, a transfer of funds may be negotiated.
2. The Library may offer surplus property to members of the Ocean State Libraries consortium. If an item has substantial value, a transfer of funds may be negotiated.
3. Surplus property may be offered for public sale in conjunction with the Cranston Purchasing Agent.^[26] Funds from a public sale will be allocated to the Library’s Reserve Fund.
4. The Library Director has the authority to determine if surplus property is obsolete and may be recycled or discarded.
5. Books and other Library materials that are deaccessioned from the collection will be sold to book vendors, offered to the Friends of the Cranston Public Library for public sale, recycled, or discarded.

200.15 Impact Fees

1. A Capital Facilities Development Impact Fee has been established at $181.21 per residential dwelling unit in Western Cranston to be placed in a Library trust fund for capital improvement and development at the Oaklawn, Knightsville, and Central Libraries and any library facility in census tract 145 and 146.^[27] 
2. Expenditures made from the Library trust fund must have the approval of the Board and the City Council through the Capital Budget and Improvement Program. Any future library-designated Impact Fee will follow this approval process.
3. All accrued interest in the Library trust fund shall be assigned for the exclusive use of the Library.

200.16 Grants

1. When required, the Board shall approve grant applications before submission.
2. Before submission, the Board must approve any grant application that would create a financial obligation for the Library. For purposes of this policy, a financial obligation includes any required matching funds, cost-sharing commitment, or ongoing operational expense associated with the grant.
3. Grant funds that require special reporting and auditing shall be placed in a distinct account by the City Finance Department. Small grants which do not require extensive recordkeeping or special auditing shall be deposited in the library’s restricted gift account.
4. Expenditures from these accounts will not require prior approval from the Board and can be made at the discretion of the Library Director.

200.17 Peterson Trust

1. The Library became a beneficiary of the Peterson Family Memorial Trust in 2004. The Library receives an annual disbursement from the Peterson Trust. The Trust designates “Ten percent (10%) thereof to the Cranston Public Library, Cranston, Rhode Island, to be used to the extent appropriate for the benefit of its Auburn Branch.”  
2. The Board has restricted these funds for the primary use at the Auburn branch with the option to use funds at other Library locations.
3. The Board delegates the authority to spend funds from the Peterson Family Memorial Trust to the Library Director except for;
4. Use of funds designated for Library locations other than the Auburn branch, over $1,000 in a given year must be authorized by the Board.

200.18 Cranston Public Library Association

1. The Cranston Public Library Association (hereinafter “CPLA”) is a recognized 501c3 nonprofit entity that will secure contributions to help fulfill the mission of the Library. Funds will be made available to the Library for the support of public services, programmatic, and capital needs.
2. The Library Director is authorized by the CPLA Board of Directors to make expenditures in furtherance of their mission up to $5,000 without CPLA Board approval.
3. The Library and the CPLA are two separate entities. Nothing in this policy should be construed to establish or imply a governance or legal relationship between the two entities.

See also related policies: Tangible Gifts Policy

Revision history

Adopted on July 8, 2026 by the Board of Trustees