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HomeMy WebLinkAbout2025-10-20 - Agendas - Final Board of Trustees October 20, 2025 4 pm AGENDA Regular Meeting –Walker Room Sallie Overbey, President Apr 2028 Rob Qualls Apr 2026 Stan Rodgers, Vice-President Apr 2027 Bret Park Apr 2028 Amy Wilbourn, Treasurer Apr 2027 Carla Davis Apr 2030 Hope Bradberry Apr 2029 Our mission is to strengthen our community and empower our citizens through free and public access to knowledge. I. Call to Order II. Roll Call III. Minutes: Approval of minutes from August 18, 2025: pages 1-3 IV. Swearing in of Trustee Hope Bradberry by Judge John Threet V. Reports A. Key Upcoming Events: page 4 B. Mission Moment C. Library Administration 1. Management Reports a. Performance Measures: pages 5-6 b. Strategic Plan progress August – September 2025: pages 7-10 2. Financial reports: pages 11-22 3. Informational a. Downtown Master Plan update b. Legislation updates c. Deli space d. Land lease update e. True Lit report f. Staff & professional development g. New staff & recognition D. Fayetteville Public Library Foundation monthly report: pages 23-25 E. Friends of the Fayetteville Public Library VI. New business A. Consent items 1. Approve scholarship application for Erin Tollet: pages 26-28 B. Discussion items 1. 2024 Audit: pages 29-59 2. Update on 2026 Budget process: pages 60-61 3. Catastrophic Leave Policy update: pages 62-63 4. December meeting VII. Public Comment Adjournment 1 2 3 Be(A)ware Allergy-Friendly Halloween Extravaganza Saturday, October 25, 10am – 12pm (drop-in) Kids are invited to visit allergy-friendly trick-or-treat stations, enjoy bounce houses, meet characters and more! This event is presented by NWA Daily, Bank of Fayetteville, and Dempsey Bakery. CFI Family: Laser Engraved Pumpkins Sunday, October 26, 1:30–4:30pm Wednesday, October 29, 5–7:45pm Thursday, October 30, 5–7:45pm Make an appointment to laser engrave a pumpkin with the help of our CFI staff and volunteers! Burning Through the Basics Monday, November 3 & 10, 1pm Wednesday, November 5 & 12, 1pm Get hands-on culinary training, develop professional skills, and earn your ServSafe® Food Handler certification in this four-part series. Registration and attendance at all four sessions are required for this course. Mountain Street Stage: Western Swing RULES Band Sunday, November 16, 2pm This family-friendly performance combines live music with stories and a visual presentation of the many Arkansans who helped shape and propel Western Swing to popularity. In Conversation with Dave Eggers Tuesday, November 18, 7pm Join the bestselling author of What is the What, The Eyes and the Impossible, and The Circle for a moderated conversation with KUAF’s Kyle Kellams. This event is free, but tickets are required. Hot Cocoa on the Plaza Friday, November 21, 5:30–6:30pm (drop-in) Grab a free cup of hot cocoa on your way to the Lights of the Ozarks lighting ceremony! Diné Woven Tapestries with the Museum of Native American History Saturday, November 22, 10am Learn about Diné textiles and the symbolism and stories woven within. These stunning works of art reflect the deep tradition, symbolism, and cultural legacy of Navajo weaving. Give the Gift of Reading – Friends’ Book Sale Saturday, November 29, 9am – 3:30pm Shop a selection of premium and gift-wrapped books including fiction, cookbooks, art, history, children’s books, and more. All items are priced as marked, and proceeds support library programs and services! faylib.org / 401 W. Mountain St., Fayetteville, AR 72701 Key Upcoming Events 4 5 6 7 8 9 10 Fayetteville Public Library FY 2025 Monthly Financial Update – through September 30, 2025 (Preliminary: Subject to Audit) This is a summary report focused primarily on unrestricted activity within Fund 10 (Library Operations) and Fund 85 (Events) through September 30, 2025. Budget Threshold: The percentage of revenue recognized, and budget spent should be approximately 75%. Library Operations (Fund 10) Revenue (Unrestricted): • Revenue recognized in September: $316,073 • Total revenue YTD: $5,334,227; above budget by ~$224k (4%), excluding Use of Reserves budgeted o Primary Driver: Unbudgeted insurance proceeds totaling ~$317k • Adjusted revenue (excluding insurance proceeds & use of reserves): o $5,017,159 recognized YTD; below budget by ~$93k (1%) Chart 1: Chart reflects actual revenue recognized compared to year-to-date budget. Chart 2: Chart reflects five-year trend of property tax revenue. Local Tax Support, $3,407,887 City Transfers, $1,368,051 State Aid & Grant Revenue, $0 Charges for Services, $113,159 Contributions & Donations, $3,669 Miscellaneous Revenue, $322,811 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 Local Tax Support City Transfers State Aid & Grant Revenue Charges for Services Contributions & Donations Miscellaneous Revenue Revenues Recognized: YTD Budget vs. Actual Excludes Transfers, Investment Earnings, & Use of Reserves YTD Budget YTD Actual Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2021 374,781 36,810 28,029 86,870 1,370,5 306,837 181,110 123,487 122,157 455,952 1,342,8 355,100 2022 172,245 109,149 31,826 278,545 1,494,8 167,110 129,381 102,381 125,610 457,275 1,521,0 680,634 2023 224,095 39,967 38,023 234,450 1,753,6 126,104 111,861 115,608 123,611 469,308 1,751,6 1,199,2 2024 321,770 13,552 12,186 129,384 1,828,8 318,454 163,559 128,815 146,921 667,315 1,867,6 345,698 2025 357,073 28,815 24,315 208,369 2,144,6 177,581 209,189 108,675 149,221 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Property Tax Revenue: 5-Year Trend 11 Library Operations (Fund 10) Expenditures (Unrestricted): • Expenditures recognized in September: $659,582 • Total expenditures YTD, including encumbrances: $6,484,553, below budget by ~$1.5m (19%) • Primary drivers of lower spending: o Personnel costs below budget ~$401k, due to salary contingency budget being front-loaded early in the year, while actuals will increase as the year progresses due to timing of COLA & merit increases o Services & charges below budget ~$457k due to lower-than-anticipated spending in programming services, training & development, travel, building insurance, operating contingency, and contract services o Planned transfers to the IT and Facilities reserves (~$506k) have not yet occurred o Spending is expected to catch up as the year progresses Chart 3: YTD Budget to Actuals comparison by category for Fund 10 (unrestricted funds). YTD Actuals include encumbrances. Events (Fund 85) Summary: Events Performance, through September 30, 2025: Month Over Month Comparison:  Net sales total $35,351, an increase of 43% from August  Operating expenses total $16,572, an increase of 12% from August  Net operating income of $18,779, an increase of 90% from August Year Over Year Comparison:  YTD net sales total $252,228, an increase of $61,524 or 32% compared to last year’s YTD net sales  YTD operating expenses total $125,090, an increase of $36,262 or 41% compared to last year’s YTD operating expenses  YTD net operating income of $127,138, an increase of $25,262 or 25% compared to last year’s YTD net operating income $4,769,580 $351,430 $1,627,806 $138,150 $593,775 $4,368,765 $286,625 $1,202,091 $130,939 $496,134 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 Personnel (excludes Mgmt fees) Materials & Supplies Services & Charges Maintenance Capital Outlay Expenditures: YTD Budget vs. Actual Excludes Transfers YTD Budget YTD Actual + Encumbered 12 Chart 4: Events operating revenue and expenses, which do not include interest, transfers, capital outlay, or depreciation. - 10,000.00 20,000.00 30,000.00 40,000.00 50,000.00 60,000.00 Jan '24 Feb '24 Mar '24 Apr '24 May '24 Jun '24 Jul '24 Aug '24 Sep '24 Oct '24 Nov '24 Dec '24 Jan '25 Feb '25 Mar '25 Apr '25 May '25 Jun '25 Jul '25 Aug '25 Sep '25 Operating Revenue vs. Operating Expenses Operating Revenue Operating Expenses 13 Preliminary: Subject to Audit Year Ending Year To Date Period Ending Month Ending 12/31/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 ANNUAL BUDGET Adopted Budget IN-YEAR BUDGET ADJ Amended Budget YTD Budget YTD ACTUAL ACTUAL ENCUMBRANCES REMAINING BUDGET % Used/Rec'd Revenue Local Tax Support 4882 - Ext. Transfer from City - Property Tax Rev. 6,426,559.00 0.00 6,426,559.00 3,415,837.00 3,407,887.02 149,221.42 0.00 3,018,672 53.0 % Local Tax Support 6,426,559.00 0.00 6,426,559.00 3,415,837.00 3,407,887.02 149,221.42 0.00 3,018,672 53.0 % City of Fayetteville Transfers 4880 - Ext. Transfer from City - Operations 1,812,401.00 0.00 1,812,401.00 1,359,299.00 1,368,050.75 148,116.75 0.00 444,350 75.5 % City of Fayetteville Transfers 1,812,401.00 0.00 1,812,401.00 1,359,299.00 1,368,050.75 148,116.75 0.00 444,350 75.5 % State Aid & Grant Revenue 4010 - State Library Turnback 169,112.00 (169,112.00)0.00 0.00 0.00 0.00 0.00 0 0.0 % State Aid & Grant Revenue 169,112.00 (169,112.00)0.00 0.00 0.00 0.00 0.00 0 0.0 % Charges for Services 4202 - Rental Income 34,700.00 0.00 34,700.00 27,228.00 0.00 0.00 0.00 34,700 0.0 % 4203 - Nontaxable Rental Fees 0.00 0.00 0.00 0.00 48,915.00 5,400.00 0.00 (48,915)0.0 % 4205 - Copier & Printer Income 4,150.00 0.00 4,150.00 3,172.00 4,738.03 514.65 0.00 (588) 114.2 % 4220 - Merchandise Sales 800.00 0.00 800.00 662.00 825.00 126.50 0.00 (25) 103.1 % 4240 - Discounts 0.00 0.00 0.00 0.00 (2,800.00) (175.00)0.00 2,800 0.0 % 4302 - Fees 71,970.00 0.00 71,970.00 47,356.00 61,494.31 7,189.13 0.00 10,476 85.4 % 4995 - Cash Over and Short 0.00 0.00 0.00 0.00 (13.72)7.90 0.00 14 0.0 % Charges for Services 111,620.00 0.00 111,620.00 78,418.00 113,158.62 13,063.18 0.00 (1,539)101.4 % Contributions & Donations 4110 - In-Kind Contributions 0.00 0.00 0.00 0.00 2,765.00 1,265.00 0.00 (2,765)0.0 % 4650 - Contributions - Undesignated 0.00 0.00 0.00 0.00 903.74 200.99 0.00 (904)0.0 % Contributions & Donations 0.00 0.00 0.00 0.00 3,668.74 1,465.99 0.00 (3,669)0.0 % Miscellaneous Revenue 4992 - Misc. Revenue 0.00 0.00 0.00 0.00 5,742.83 150.00 0.00 (5,743)0.0 % 4993 - Insurance Proceeds 0.00 0.00 0.00 0.00 317,068.50 0.00 0.00 (317,069)0.0 % Miscellaneous Revenue 0.00 0.00 0.00 0.00 322,811.33 150.00 0.00 (322,811)0.0 % Transfers In 6010 - Int. Transfer In 345,000.00 0.00 345,000.00 185,000.00 72,100.49 0.00 0.00 272,900 20.9 % Library Operations Fayetteville Public Library Budget to Actual (Unrestricted) As of September 30, 2025 This report reflects only unrestricted funds within Fund 10.14 Preliminary: Subject to Audit Year Ending Year To Date Period Ending Month Ending 12/31/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 ANNUAL BUDGET Adopted Budget IN-YEAR BUDGET ADJ Amended Budget YTD Budget YTD ACTUAL ACTUAL ENCUMBRANCES REMAINING BUDGET % Used/Rec'd 4899 - Ext. Transfer In 142,386.00 0.00 142,386.00 71,193.00 2,936.57 240.00 0.00 139,449 2.1 % Transfers In 487,386.00 0.00 487,386.00 256,193.00 75,037.06 240.00 0.00 412,349 15.4 % Investment Earnings Investment Income 0.00 0.00 0.00 0.00 43,613.63 3,815.39 0.00 (43,614)0.0 % Total Investment Earnings 0.00 0.00 0.00 0.00 43,613.63 3,815.39 0.00 (43,614)0.0 % Use of Reserves 238,086.00 0.00 238,086.00 238,086.00 0.00 0.00 0.00 238,086 0.0 % Total Revenue 9,245,164.00 (169,112.00)9,076,052.00 5,347,833.00 5,334,227.15 316,072.73 0.00 3,741,825 58.8 % Expenditures Personnel Services Salary & Wages 5100 - Salaries 2,282,361.00 0.00 2,282,361.00 1,711,764.00 1,721,223.57 184,344.22 0.00 561,137 75.4 % 5102 - Hourly Wages 2,227,971.00 0.00 2,227,971.00 1,670,986.00 1,454,290.41 166,325.37 0.00 773,681 65.3 % 5103 - Overtime 0.00 0.00 0.00 0.00 23,448.24 2,922.54 0.00 (23,448)0.0 % 5105 - Vacation Pay 0.00 0.00 0.00 0.00 143,332.45 21,788.67 0.00 (143,332)0.0 % 5106 - Sick Pay 0.00 0.00 0.00 0.00 70,533.05 10,920.82 0.00 (70,533)0.0 % 5112 - Holiday Pay 0.00 0.00 0.00 0.00 87,623.50 11,928.18 0.00 (87,624)0.0 % 5113 - Social Security Taxes 345,041.00 0.00 345,041.00 258,784.00 253,348.85 29,017.91 0.00 91,692 73.4 % 5115 - Unemployment 6,950.00 0.00 6,950.00 5,206.00 7,402.51 119.98 0.00 (453) 106.5 % 5116 - Workers Compensation 50,000.00 0.00 50,000.00 50,000.00 41,071.54 0.00 0.00 8,928 82.1 % Total Salary & Wages 4,912,323.00 0.00 4,912,323.00 3,696,740.00 3,802,274.12 427,367.69 0.00 1,110,049 77.4 % Employee Benefits 5109 - LT Disability 7,592.00 0.00 7,592.00 5,699.00 (82.86)(6.79)0.00 7,675 (1.1) % 5110 - Salary Contingency 413,233.00 0.00 413,233.00 413,233.00 0.00 0.00 0.00 413,233 0.0 % 5120 - Health Insurance 439,740.00 0.00 439,740.00 329,801.00 249,111.13 27,825.32 0.00 190,629 56.6 % 5121 - Health Savings Account 63,336.00 0.00 63,336.00 47,510.00 42,292.40 4,463.60 0.00 21,044 66.8 % 5122 - Life Insurance 6,435.00 0.00 6,435.00 4,833.00 10,774.37 1,388.71 0.00 (4,339) 167.4 % 5125 - AD&D 2,149.00 0.00 2,149.00 1,615.00 (26.62)(1.95)0.00 2,176 (1.2) % 5130 - EAP 0.00 0.00 0.00 0.00 1,722.12 0.00 0.00 (1,722)0.0 % 5135 - Retirement Saving Plan 360,202.00 0.00 360,202.00 270,149.00 262,699.94 29,927.64 0.00 97,502 72.9 % Library Operations Fayetteville Public Library Budget to Actual (Unrestricted) As of September 30, 2025 This report reflects only unrestricted funds within Fund 10.15 Preliminary: Subject to Audit Year Ending Year To Date Period Ending Month Ending 12/31/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 ANNUAL BUDGET Adopted Budget IN-YEAR BUDGET ADJ Amended Budget YTD Budget YTD ACTUAL ACTUAL ENCUMBRANCES REMAINING BUDGET % Used/Rec'd Employee Benefits 1,292,687.00 0.00 1,292,687.00 1,072,840.00 566,490.48 63,596.53 0.00 726,197 43.8 % Total Personnel Services 6,205,010.00 0.00 6,205,010.00 4,769,580.00 4,368,764.60 490,964.22 0.00 1,836,245 70.4 % Materials & Supplies 5200 - Office Supplies & Printing 100,688.00 0.00 100,688.00 80,532.00 59,349.76 10,630.10 0.00 41,338 58.9 % 5201 - Small Tools & Equipment 28,000.00 0.00 28,000.00 20,300.00 3,820.24 46.38 0.00 24,180 13.6 % 5203 - Medical Supplies 4,025.00 0.00 4,025.00 4,025.00 285.96 0.00 0.00 3,739 7.1 % 5210 - Food & Catering for Events 6,150.00 0.00 6,150.00 2,925.00 3,210.46 785.94 0.00 2,940 52.2 % 5218 - Cleaning Supplies 61,300.00 0.00 61,300.00 45,975.00 47,085.38 6,199.80 249.25 13,965 76.8 % 5220 - Tech Supplies 20,550.00 0.00 20,550.00 15,200.00 11,111.29 1,616.82 0.00 9,439 54.1 % 5224 - Landscape Materials 10,000.00 9,947.00 19,947.00 18,747.00 7,592.77 0.00 0.00 12,354 38.1 % 5226 - Merchandise for Resale 100.00 0.00 100.00 0.00 0.00 0.00 0.00 100 0.0 % 5230 - Computer Hardware Supplies 53,500.00 0.00 53,500.00 38,250.00 51,370.72 1,827.56 0.00 2,129 96.0 % 5235 - Signage 9,375.00 4,205.62 13,580.62 12,380.62 6,640.07 759.28 0.00 6,941 48.9 % 5250 - On-line Database 0.00 0.00 0.00 0.00 1,500.00 0.00 0.00 (1,500)0.0 % 5251 - Programming Materials & Supplies 124,282.00 (30,869.69) 93,412.31 70,368.31 49,961.15 3,638.74 0.00 43,451 53.5 % 5252 - Repair Parts & Damaged Repairs 1,600.00 0.00 1,600.00 1,200.00 1,387.33 0.00 0.00 213 86.7 % 5255 - Circulating Equipment 28,300.00 0.00 28,300.00 21,550.00 319.88 59.24 0.00 27,980 1.1 % 5260 - Print Books 0.00 0.00 0.00 0.00 451.68 (108.27)0.00 (452)0.0 % 5265 - E-Book 0.00 0.00 0.00 0.00 18,177.95 0.00 0.00 (18,178)0.0 % 5270 - E-Book Consortium 0.00 0.00 0.00 0.00 6,505.55 0.00 0.00 (6,506)0.0 % 5287 - Audio 0.00 0.00 0.00 0.00 81.73 0.00 0.00 (82)0.0 % 5900 - Miscellaneous Expense 0.00 0.00 0.00 0.00 272.46 0.00 0.00 (272)0.0 % 5904 - Incident Repair or Replacement 0.00 19,977.00 19,977.00 19,977.00 17,251.59 0.00 0.00 2,725 86.4 % Materials & Supplies 447,870.00 3,259.93 451,129.93 351,429.93 286,375.97 25,455.59 249.25 164,505 63.5 % Services & Charges 5301 - Advertisement 15,100.00 0.00 15,100.00 11,875.00 3,751.04 609.00 0.00 11,349 24.8 % 5303 - Subscriptions, Publications and Dues 99,610.00 4,756.25 104,366.25 78,516.25 80,865.28 10,538.46 19,845.18 3,656 77.5 % 5304 - Licenses & Permits 150.00 0.00 150.00 0.00 538.96 35.83 0.00 (389) 359.3 % 5305 - Postage 20,000.00 0.00 20,000.00 15,002.00 10,064.58 0.00 0.00 9,935 50.3 % 5346 - Drop Box Services 1,450.00 0.00 1,450.00 1,450.00 1,450.00 0.00 (2,800.00)2,800 100.0 % 5350 - Programming Services 180,270.00 43,744.00 224,014.00 213,289.00 126,798.53 (4,648.51)0.00 97,215 56.6 % 5358 - Hospitality 1,400.00 0.00 1,400.00 1,100.00 138.47 0.00 0.00 1,262 9.9 % 5360 - Mileage Reimbursement 4,850.00 0.00 4,850.00 3,327.00 270.80 193.90 0.00 4,579 5.6 % 5361 - Training & Development 66,375.00 0.00 66,375.00 58,474.00 27,600.09 6,851.12 1.00 38,774 41.6 % 5362 - Travel 80,940.00 0.00 80,940.00 72,000.00 30,290.57 5,856.78 0.00 50,649 37.4 % Library Operations Fayetteville Public Library Budget to Actual (Unrestricted) As of September 30, 2025 This report reflects only unrestricted funds within Fund 10.16 Preliminary: Subject to Audit Year Ending Year To Date Period Ending Month Ending 12/31/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 ANNUAL BUDGET Adopted Budget IN-YEAR BUDGET ADJ Amended Budget YTD Budget YTD ACTUAL ACTUAL ENCUMBRANCES REMAINING BUDGET % Used/Rec'd 5375 - Employee Recognition 26,976.00 0.00 26,976.00 20,601.00 8,892.26 2,052.33 0.00 18,084 33.0 % 5385 - Board & Volunteer Recognition 4,000.00 0.00 4,000.00 1,000.00 1,297.60 0.00 0.00 2,702 32.4 % 5390 - Uniform Expense 13,000.00 0.00 13,000.00 9,900.00 12,887.60 1,545.57 0.00 112 99.1 % 5424 - Equipment Lease/Rental 102,700.00 0.00 102,700.00 75,527.00 76,321.81 8,544.22 0.00 26,378 74.3 % 5421 - Insurance - Building 255,000.00 0.00 255,000.00 255,000.00 182,659.13 0.00 0.00 72,341 71.6 % 5422 - Insurance - Liability 27,250.00 0.00 27,250.00 27,250.00 18,939.19 3,176.25 0.00 8,311 69.5 % 5423 - Other Rental 12,600.00 0.00 12,600.00 9,450.00 13,786.55 1,560.00 0.00 (1,187) 109.4 % 5394 - Admin & Management Fees 32,200.00 12,281.59 44,481.59 36,431.59 26,205.94 0.00 0.00 18,276 58.9 % 5395 - Bank Service Charges 28,000.00 0.00 28,000.00 20,998.00 19,689.22 2,141.17 0.00 8,311 70.3 % 5399 - In-Kind Expense 0.00 0.00 0.00 0.00 2,765.00 1,265.00 0.00 (2,765)0.0 % 5500 - Property Tax Expense 600.00 0.00 600.00 600.00 0.00 0.00 0.00 600 0.0 % 5905 - Operating Contingency 40,000.00 107,425.00 147,425.00 147,425.00 0.00 0.00 0.00 147,425 0.0 % Total Services & Charges 1,012,471.00 168,206.84 1,180,677.84 1,059,215.84 645,212.62 39,721.12 17,046.18 518,419 54.6 % 5340 - Audit 54,000.00 0.00 54,000.00 54,000.00 50,000.00 0.00 400.00 3,600 92.6 % 5341 - Legal 15,000.00 0.00 15,000.00 11,250.00 22,740.57 802.50 0.00 (7,741) 151.6 % 5344 - Contract Services 405,840.00 38,179.75 444,019.75 374,101.75 213,236.67 29,523.77 13,853.96 216,929 48.0 % Purchased Professional and Technical Ser- vices 474,840.00 38,179.75 513,019.75 439,351.75 285,977.24 30,326.27 14,253.96 212,789 55.7 % 5310 - Telecommunications 53,400.00 0.00 53,400.00 40,050.00 26,463.16 2,787.91 0.00 26,937 49.6 % 5312 - Natural Gas 27,200.00 0.00 27,200.00 18,500.00 28,210.89 316.41 0.00 (1,011) 103.7 % 5314 - Electricity 288,000.00 (169,112.00) 118,888.00 50,888.00 170,053.90 24,875.50 0.00 (51,166) 143.0 % 5316 - Municipal Water 24,600.00 0.00 24,600.00 19,800.00 14,872.81 3,851.42 0.00 9,727 60.5 % Utilities 393,200.00 (169,112.00)224,088.00 129,238.00 239,600.76 31,831.24 0.00 (15,513)106.9 % Services & Charges 1,880,511.00 37,274.59 1,917,785.59 1,627,805.59 1,170,790.62 101,878.63 31,300.14 715,695 61.0 % Maintenance 5401 - Building Maintenance 66,100.00 0.00 66,100.00 49,450.00 66,580.76 12,191.11 0.00 (481) 100.7 % 5405 - Landscape Maintenance 4,000.00 0.00 4,000.00 2,000.00 36.22 0.00 0.00 3,964 0.9 % 5410 - Equipment Maintenance 90,100.00 0.00 90,100.00 86,700.00 64,321.62 0.00 0.00 25,778 71.4 % Maintenance 160,200.00 0.00 160,200.00 138,150.00 130,938.60 12,191.11 0.00 29,261 81.7 % Transfers Out 6020 - Int. Transfer Out 0.00 505,725.00 505,725.00 505,725.00 0.00 0.00 0.00 505,725 0.0 % Transfers Out 0.00 505,725.00 505,725.00 505,725.00 0.00 0.00 0.00 505,725 0.0 % Capital Outlay 607,547.00 40,720.60 648,267.60 593,774.60 481,470.53 29,092.20 14,662.97 152,134 74.3 % Library Operations Fayetteville Public Library Budget to Actual (Unrestricted) As of September 30, 2025 This report reflects only unrestricted funds within Fund 10.17 Preliminary: Subject to Audit Year Ending Year To Date Period Ending Month Ending 12/31/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 ANNUAL BUDGET Adopted Budget IN-YEAR BUDGET ADJ Amended Budget YTD Budget YTD ACTUAL ACTUAL ENCUMBRANCES REMAINING BUDGET % Used/Rec'd Total Expenditures 9,301,138.00 586,980.12 9,888,118.12 7,986,465.12 6,438,340.32 659,581.75 46,212.36 3,403,565 65.1 % Change in Net Assets (55,974.00)(756,092.12)(812,066.12)(2,638,632.12)(1,104,113.17)(343,509.02)(46,212.36)338,259 136.0 % Library Operations Fayetteville Public Library Budget to Actual (Unrestricted) As of September 30, 2025 This report reflects only unrestricted funds within Fund 10.18 Preliminary: Subject to Audit 10--Library Operations 15--Expansion - Operations 20--Long Term - Reserve 30--Facility Reserve 40--Furniture & Equipment Reserve 50--Technology Equipment Reserve 70--Bond Debt Service Fund 80--Food Services 85--Events All Funds Year Ending Year To Date 12/31/2025 Remaining Budget Amended Budget YTD Actual YTD Actual YTD Actual YTD Actual YTD Actual YTD Actual YTD Actual YTD Actual YTD Actual YTD Actual Includes Encumbrance Revenue Local Tax Support 9,494,559.00 3,407,887.02 0.00 0.00 0.00 0.00 0.00 1,635,783.31 0.00 0.00 5,043,670.33 4,450,888.67 City of Fayetteville Transfers 2,925,401.00 2,034,300.75 0.00 0.00 278,000.00 0.00 0.00 0.00 0.00 0.00 2,312,300.75 613,100.25 State Aid & Grant Revenue 417,730.62 362,901.03 0.00 0.00 0.00 0.00 0.00 0.00 22.40 0.00 362,923.43 54,807.19 Charges for Services 477,880.00 113,158.62 0.00 0.00 0.00 0.00 0.00 0.00 0.00 252,226.50 365,385.12 112,494.88 Contributions & Donations 26,956.84 27,625.58 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 27,625.58 (668.74) Miscellaneous Revenue 0.00 322,811.33 0.00 0.00 0.00 0.00 0.00 0.00 142.98 1.09 322,955.40 (322,955.40) Transfers In 647,386.00 75,037.06 0.00 0.00 0.00 0.00 160,000.00 0.00 0.00 0.00 235,037.06 412,348.94 Investment Earnings Investment Income 0.00 43,613.63 18,263.04 43,593.05 14,979.84 7,326.05 8,249.83 0.00 0.00 904.71 136,930.15 (136,930.15) Gain/Loss - Realized 0.00 0.00 0.00 (150.80)(55.84)(22.89)(28.96)0.00 0.00 0.00 (258.49)258.49 Gain/Loss - Unrealized 0.00 0.00 0.00 9,778.94 1,787.17 935.65 2,048.04 0.00 0.00 0.00 14,549.80 (14,549.80) Investment Management Fees & Expenses 0.00 0.00 0.00 (3,372.00)(1,095.00)(536.00)(668.00)0.00 0.00 0.00 (5,671.00)5,671.00 Total Investment Earnings 0.00 43,613.63 18,263.04 49,849.19 15,616.17 7,702.81 9,600.91 0.00 0.00 904.71 145,550.46 (145,550.46) Use of Reserves 607,331.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 607,331.00 Total Revenue 14,597,244.46 6,387,335.02 18,263.04 49,849.19 293,616.17 7,702.81 169,600.91 1,635,783.31 165.38 253,132.30 8,815,448.13 5,781,796.33 Expenditures Personnel Services Salary & Wages 5,411,857.94 3,976,277.57 0.00 0.00 0.00 0.00 0.00 0.00 0.00 108,633.07 4,084,910.64 1,326,947.30 Employee Benefits 1,356,638.00 592,740.95 0.00 0.00 0.00 0.00 0.00 0.00 (1,509.76)8,239.65 599,470.84 757,167.16 Total Personnel Services 6,768,495.94 4,569,018.52 0.00 0.00 0.00 0.00 0.00 0.00 (1,509.76)116,872.72 4,684,381.48 2,084,114.46 Materials & Supplies 1,391,764.19 790,803.65 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4,099.52 794,903.17 588,915.79 Services & Charges 2,232,657.21 1,263,021.02 0.00 0.00 0.00 0.00 0.00 0.00 13.44 4,117.34 1,267,151.80 934,205.27 Maintenance 167,637.17 137,779.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 137,779.01 29,858.16 Transfers Out 4,078,725.00 160,000.00 0.00 0.00 0.00 0.00 0.00 1,635,783.31 72,100.49 0.00 1,867,883.80 2,210,841.20 Capital Outlay 1,065,174.24 577,241.26 0.00 0.00 (9,591.91)0.00 0.00 0.00 0.00 8,865.12 576,514.47 473,996.80 Total Expenditures 15,704,453.75 7,497,863.46 0.00 0.00 (9,591.91)0.00 0.00 1,635,783.31 70,604.17 133,954.70 9,328,613.73 6,321,931.68 Change in Net Assets (1,107,209.29)(1,110,528.44)18,263.04 49,849.19 303,208.08 7,702.81 169,600.91 0.00 (70,438.79)119,177.60 (513,165.60)(540,135.35) Library Fayetteville Public Library Summarized Budget to Actual As of September 30, 2025 Filter tab and prompt selections: As of date: 09/30/2025 ; Department: All; Include subdimensions: Off; Hide inactives: Off ; Fund: Library; Include subdimensions: Off; Hide inactives: Off ; Client or Donor: All; Include subdimensions: Off ; Client or Donor type: All; Include subdimensions: Off ; Vendor: All; Include subdimensions: Off ; Vendor type: All; Include subdimensions: Off ; Employee: All; Include subdimensions: Off ; Employee type: All; Include subdimensions: Off ; Item: All ; Product line: All; Include subdimensions: Off ; Restriction: All; Include subdimensions: Off ; Project: All; Include subdimensions: Off ; Project type: All; Include subdimensions: Off ; Created on 10/08/2025, 10:50 AM CDT Page 1 19 Preliminary: Subject to Audit 10--Library Operations 15--Expansion - Operations 20--Long Term - Reserve 30--Facility Reserve 40--Furniture & Equipment Reserve 50--Technology Equipment Reserve 60--Capital Construction Fund 70--Bond Debt Service Fund 80--Food Services 85--Events All Funds Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 Assets Cash & Investments 1000 - Undeposited Funds 1,000 0 0 0 0 0 0 0 0 300 1,300 1003 - Petty Cash 3,074 0 0 0 0 0 0 0 0 0 3,074 1009 - Bank of Fayetteville - FPL 55,037 0 0 0 0 0 0 0 0 (274)54,762 1020 - Arvest - Library Operations 629,435 0 0 0 0 0 0 0 0 0 629,435 1025 - Arvest - Events 0 0 0 0 0 0 0 0 0 187,200 187,201 1030 - First Security - FPL 551,710 0 0 0 0 0 0 0 0 0 551,711 1100 - Schwab FPL - Operating 844,206 0 0 0 0 0 0 0 0 0 844,205 1105 - Schwab FPL - Expansion O&M 0 667,974 0 0 0 0 0 0 0 0 667,974 1110 - Schwab FPL - Long Term 0 0 1,833,021 0 0 0 0 0 0 0 1,833,020 1115 - Schwab FPL - Facilities Replace- ment 0 0 0 682,660 0 0 0 0 0 0 682,661 1120 - Schwab FPL - Furniture & Equip.0 0 0 0 291,479 0 0 0 0 0 291,479 1125 - Schwab FPL - Technology 0 0 0 0 0 470,459 0 0 0 0 470,459 1130 - Schwab FPL - Expansion Capital 0 0 0 0 0 0 4 0 0 0 5 Total Cash & Investment 2,084,462 667,974 1,833,021 682,660 291,479 470,459 4 0 0 187,226 6,217,286 Receivables 1200 - Claims Pending 89 0 0 0 0 0 0 0 0 0 89 1240 - Accounts Receivable 164,934 0 0 0 0 0 0 0 0 105,952 270,885 1243 - Grants Receivable 79,799 0 0 0 0 0 0 0 0 0 79,800 1265 - Sales Tax Rebate Receivable 6,464 0 0 9,592 0 0 0 0 0 0 16,056 1270 - Due From Other Funds 232,572 0 76,240 30 0 123,082 0 0 0 49 431,972 1271 - Due From Other Governments (Property Tax & Debt Service) 6,995,416 0 0 0 0 0 0 3,357,800 0 0 10,353,215 1275 - 10 Due From 91 364,475 0 0 0 0 0 0 0 0 0 364,475 1279 - 10 Due From 80 602,467 0 0 0 0 0 0 0 0 0 602,468 1280 - 80 Due From 10 0 0 0 0 0 0 0 0 348,004 0 348,004 1281 - 10 Due From 85 502,913 0 0 0 0 0 0 0 0 0 502,912 1282 - 85 Due From 10 0 0 0 0 0 0 0 0 0 637,959 637,959 1285 - 80 Due From 85 0 0 0 0 0 0 0 0 2,361 0 2,361 1286 - 85 Due From 80 0 0 0 0 0 0 0 0 0 8,920 8,920 1400 - Interfund (1,232,239) 3,899,883 (1,115,400)3,787 43,381 365,371 (192,504) (1,772,280)0 0 0 Total Receivables 7,716,890 3,899,883 (1,039,160)13,409 43,381 488,453 (192,504)1,585,520 350,365 752,880 13,619,116 Prepaid Expenses 1500 - Prepaid Expenses 118,085 0 0 0 0 0 0 0 0 0 118,085 Prepaid Expenses 118,085 0 0 0 0 0 0 0 0 0 118,085 Fixed Assets Depreciable Assets 1801 - Building 22,132,023 0 0 0 0 0 0 0 0 0 22,132,023 1802 - Vehicles 91,190 0 0 0 0 0 0 0 0 0 91,190 1805 - Software 174,237 0 0 0 0 0 0 0 0 0 174,237 1811 - Books & Publications 2,620,698 0 0 0 0 0 0 0 0 0 2,620,698 1813 - Equipment 3,697,952 0 0 0 0 0 0 0 0 0 3,697,952 1815 - Furniture & Fixtures 263,427 0 0 0 0 0 0 0 0 60,681 324,108 1999 - Accumulated Depreciation (11,940,028)0 0 0 0 0 0 0 0 (20,950) (11,960,978) Total Depreciable Assets 17,039,499 0 0 0 0 0 0 0 0 39,731 17,079,230 Non Depreciable Assets 1,605,676 0 0 0 0 0 0 0 0 0 1,605,676 Total Fixed Assets, Net 18,645,175 0 0 0 0 0 0 0 0 39,731 18,684,906 Library Balance Sheet Fayetteville Public Library Created on 10/08/2025, 10:48 AM CDT Page 1 20 Preliminary: Subject to Audit 10--Library Operations 15--Expansion - Operations 20--Long Term - Reserve 30--Facility Reserve 40--Furniture & Equipment Reserve 50--Technology Equipment Reserve 60--Capital Construction Fund 70--Bond Debt Service Fund 80--Food Services 85--Events All Funds Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 Total Assets $ 28,564,612 $ 4,567,857 $ 793,861 $ 696,069 $ 334,860 $ 958,912 $ (192,500)$ 1,585,520 $ 350,365 $ 979,837 $ 38,639,393 Liabilities and Fund Balances Liabilities Accounts Payable 2001 - Accounts Payable 178,278 0 0 0 0 0 0 0 0 0 178,278 2004 - Friends of FPL Pass through 2,002 0 0 0 0 0 0 0 0 0 2,002 2005 - FDN Designated Pass Through to FPL (100,438)0 0 0 0 0 0 0 0 0 (100,438) 2007 - FPL CentreSuite (2,440)0 0 0 0 0 0 0 0 0 (2,440) 2099 - AR State Library Scholarship Pass Through 793 0 0 0 0 0 0 0 0 0 793 2415 - Security Deposits 5,000 0 0 0 0 0 0 0 0 42,500 47,500 2414 - Convenience Fee 463 0 0 0 0 0 0 0 0 0 463 2020 - Accrued Accounts Payable 79,420 0 0 0 0 0 0 0 0 0 79,420 Total Accounts Payable 163,078 0 0 0 0 0 0 0 0 42,500 205,578 Salaries & Benefits Payable 2125 - Accrued Salaries & Wages 94,742 0 0 0 0 0 0 0 0 2,023 96,765 2130 - Voluntary Vision Insurance 456 0 0 0 0 0 0 0 0 0 456 2140 - Voluntary Life, STD & AD&D 1,690 0 0 0 0 0 0 0 0 0 1,690 2145 - Accrued Vacation 282,939 0 0 0 0 0 0 0 0 2,060 284,999 2148 - Voluntary Supplemental Insur- ance 93 0 0 0 0 0 0 0 0 0 93 2155 - Voluntary Dental Insurance 1,971 0 0 0 0 0 0 0 0 0 1,971 2160 - Accrued Sick Time 127,948 0 0 0 0 0 0 0 0 0 127,948 2175 - Health Insurance Liability 13,718 0 0 0 0 0 0 0 0 0 13,717 2185 - FSA - Medical 375 0 0 0 0 0 0 0 0 0 375 2186 - FSA - Dependent Care 816 0 0 0 0 0 0 0 0 0 817 2187 - Health Savings Account Liabil- ity 12,006 0 0 0 0 0 0 0 0 0 12,005 2195 - Capital Campaign Liability 167 0 0 0 0 0 0 0 0 0 167 2196 - Caring Committee (1,709)0 0 0 0 0 0 0 0 0 (1,708) 2197 - Healthy Habits 3,176 0 0 0 0 0 0 0 0 0 3,176 2198 - Annual Fund Liability 30 0 0 0 0 0 0 0 0 0 30 Total Salaries & Benefits Payable 538,418 0 0 0 0 0 0 0 0 4,083 542,501 Other Payables 2057 - Sales Tax 0 0 0 0 0 0 0 0 0 141 142 2061 - Short Term Tax 0 0 0 0 0 0 0 0 0 15 14 Total Other Payables 0 0 0 0 0 0 0 0 0 156 156 Deferred Revenue 2410 - Deferred Revenue 475,013 0 0 0 0 0 0 0 0 0 475,013 Total Deferred Revenue 475,013 0 0 0 0 0 0 0 0 0 475,013 Due to Other Funds Library Balance Sheet Fayetteville Public Library Created on 10/08/2025, 10:48 AM CDT Page 2 21 Preliminary: Subject to Audit 10--Library Operations 15--Expansion - Operations 20--Long Term - Reserve 30--Facility Reserve 40--Furniture & Equipment Reserve 50--Technology Equipment Reserve 60--Capital Construction Fund 70--Bond Debt Service Fund 80--Food Services 85--Events All Funds Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending Month Ending 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 09/30/2025 Due to Foundation 3,154 0 0 0 0 0 0 0 0 0 3,154 Due to Library 0 0 0 0 0 0 0 0 602,468 502,912 1,105,380 Due to Others 197,770 0 0 68,517 0 84,885 77,580 0 3,160 12 431,923 Due to Food Services 348,003 0 0 0 0 0 0 0 0 2,361 350,365 Internal Due To 637,959 0 0 0 0 0 0 0 8,920 0 646,879 Total Due to Other Funds 1,186,886 0 0 68,517 0 84,885 77,580 0 614,548 505,285 2,537,701 Total Liabilities 2,363,395 0 0 68,517 0 84,885 77,580 0 614,548 552,024 3,760,949 Fund Balance 26,201,217 4,567,857 793,861 627,552 334,860 874,027 (270,080)1,585,520 (264,183)427,813 34,878,444 Total Liabilities and Fund Balances $ 28,564,612 $ 4,567,857 $ 793,861 $ 696,069 $ 334,860 $ 958,912 $ (192,500)$ 1,585,520 $ 350,365 $ 979,837 $ 38,639,393 Library Balance Sheet Fayetteville Public Library Created on 10/08/2025, 10:48 AM CDT Page 3 22 23 24 25 26 27 28 29 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Independent Auditor’s Report and Financial Statements December 31, 2024 30 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Contents December 31, 2024 Independent Auditor’s Report ....................................................................................................................... 1 Management’s Discussion and Analysis ..................................................................................................... 4 Financial Statements Governmental Funds Balance Sheet/Statement of Net Position ................................................................ 9 Statement of Governmental Funds Revenues, Expenditures, and Changes in Fund Balances/Statement of Activities ............................................................................................................. 11 Notes to Financial Statements .................................................................................................................... 12 Required Supplementary Information Budgetary Comparison Schedule and Notes to Required Supplementary Information .............................. 24 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards – Independent Auditor’s Report ....................................................... 25 31 Forvis Mazars, LLP is an independent member of Forvis Mazars Global Limited Independent Auditor’s Report Board of Trustees Fayetteville Public Library Fayetteville, Arkansas Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the governmental activities and each major fund of Fayetteville Public Library (Library), a component unit of the City of Fayetteville, Arkansas, as of and for the year ended December 31, 2024 and the related notes to the financial statements, which collectively comprise the Library’s basic financial statements, as listed in the table of contents. In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Library, as of December 31, 2024 and the respective changes in financial position for the year then ended , in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Library and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Library’s ability to continue as a going concern for 12 months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 32 Board of Trustees Fayetteville Public Library 2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Library’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Library’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 33 Board of Trustees Fayetteville Public Library 3 Other Information Report on Summarized Comparative Information We have previously audited the Library’s December 31, 2023 financial statements, and we expressed unmodified opinions on the respective financial statements of the governmental activities and each major fund in our report dated August 6, 2025. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 202 3 is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 6, 2025 on our consideration of the Library’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Library’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Library’s internal control over financial reporting and compliance. Rogers, Arkansas August 6, 2025 34 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Management’s Discussion and Analysis December 31, 2024 4 Introduction As management of Fayetteville Public Library (Library), we offer readers of the Library’s financial statements this narrative overview and analysis of the Library’s financial activities for the year ended December 31, 2024. It should be read in conjunction with the accompanying basic financial statements of the Library. The basic financial statements of the Library include Fayetteville Public Library Foundation (Foundation), which is a blended component unit of the Library. Financial Highlights Key financial highlights for 2024 are as follows: • The assets of the Library exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $56,989,012 (net position). Unrestricted net position of $16,264,714, of which $13,681,312 may be used to meet the Library’s ongoing obligations and $2,583,402 is available to meet the Foundation obligations. • Total net position increased by $3,400,571. The Library’s portion of net position increased by $1,519,496, or 4%. The Foundation’s net position increased by $1,881,075, or 10%. • As of the close of the current year, the Library’s governmental funds reported ending fund balances of $7,337,549 attributable to the Library and $7,602,901 attributable to its Foundation, a decrease of $280,276, or 4.5%, for the Library and a decrease of $1,107,792, or 15%, for the Foundation in comparison with the prior year. • At the end of the current fiscal year, unassigned fund balance for the governmental funds was $7,219,464 or 36% of total governmental fund expenditures. The Library portion of this amount excluding its Foundation was $7,219,464, or 53%, of Library governmental fund expenditures. Overview of Financial Statements This annual report consists of three parts: management’s discussion and analysis (this section), the basic financial statements, and required supplementary information (Budgetary Comparison Schedule). The basic financial statements include information that presents two different views of the Library. The Library’s basic financial statements not only include the Library but also its blended component unit, Fayetteville Public Library Foundation (Foundation). The Foundation, although a legal separate entity, is, in substance, part of the Library’s operations since its primary function is to raise funds for the benefit of the Library. The Board of Directors for the Foundation is appointed by the Board of Trustees for the Library. The effect of the transactions between the Library and Foundation is eliminated in the basic financial statements. Governmental funds are used to account for essentially the same functions reported as in the government -wide financial statements (statement of net position and statement of activities columns on pages 9 and 10, respectively). However, unlike the government-wide financial statements, government fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the Library’s near-term financing requirements. Major funds of the Library are as follows: General Fund – This is the Library’s primary operating fund. It accounts for all financial resources of the general government. Fayetteville Public Library (FPL) Foundation Fund – This fund accounts for restricted and unrestricted contributions and other funds of the Library not included in the General Fund . 35 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Management’s Discussion and Analysis December 31, 2024 5 The adjustment column of the financial statements represents adjustments necessary to convert the governmental fund financial statements to the government-wide financial statements under the full accrual method of accounting. The adjustments columns provide reconciliations to facilitate the comparison between the governmental fund and government-wide financial statements. The fourth column presents the Library’s government-wide financial statements, which are designed to provide readers with a broad overview of the Library’s finances in a manner similar to a private-sector business. The statement of net position presents information on all of the Library’s assets, liabilities, and deferred inflows/outflows of resources with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Library is improving or deteriorating. The statement of activities presents information showing how the Library’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. Because the focus of the governmental fund is narrower than that of the government-wide financial statements, it is useful to compare the information presented for the governmental fund with similar information presented for the government-wide financial statements. By doing so, readers may better understand the long-term impact of the Library’s near-term financing decisions. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the information in the financial statements. Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the Library, assets exceeded liabilities and deferred inflows of resources by $56,989,012 at the close of the most recent fiscal year. A portion of the Library’s net position (29%) is unrestricted and may be used to meet the Library’s ongoing obligations to citizens and creditors. 36 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Management’s Discussion and Analysis December 31, 2024 6 Table 1: Statements of Net Position 2024 2023 Current and other assets 25,620,039$ 27,387,253$ Capital assets, net 33,149,885 33,126,148 Total assets 58,769,924 60,513,401 Current and other liabilities 1,780,912 6,924,960 Total liabilities 1,780,912 6,924,960 Net investment in capital assets 32,568,538 27,596,672 Restricted 8,155,760 7,610,078 Unrestricted 16,264,714 18,381,691 Total net position 56,989,012$ 53,588,441$ An additional portion of the net position (57%) reflects its net investment in capital assets (e.g., land, buildings, library materials, and furniture and equipment). The Library uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. The remaining balance of net position (14%) represents resources that are subject to external restrictions on how they may be used. Combined unrestricted net position decreased 12% and total net position increased 6% due to revenues exceeding expenses in 2024 by $3,400,571. Table 2: Statements of Activities 2024 2023 Revenues Grants and contributions 6,776,562$ 5,375,493$ Property taxes 9,814,219 9,223,129 Fines and fees 82,398 102,915 Investment income 813,864 796,829 Miscellaneous 654,181 747,165 Total Revenues 18,141,224 16,245,531 Expenses 14,740,653 14,302,006 Changes in Net Position 3,400,571 1,943,525 Net Position, Beginning of Year 53,588,441 51,644,916 Net Position, End of Year 56,989,012$ 53,588,441$ 37 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Management’s Discussion and Analysis December 31, 2024 7 In 2024, revenues increased by $1,765,930, or 12%, and expenses increased by $308,884, or 2%, primarily due to: • An increase in property tax revenue of $591,090. • An increase in capital campaign contributions of $2,130,420. • A decrease of $663,000 of contributions from the primary government. • An increase in personnel services of $327,840 due to the Library expansion. Financial Analysis of the Governmental Fund As noted earlier, the focus of the Library’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Library’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a Library’s net resources available for discretionary use at the end of the fiscal year. As of the end of the current fiscal year, the general fund of the Library reported ending fund balances of $7,337,549. Approximately 98% of the Library’s ending fund balance amount constitutes unassigned fund balance, which is available for spending at the Library’s discretion. The remainder of the fund balance has spending constraints placed on the purpose for which resources can be used . As of the end of the current fiscal year, the FPL Foundation fund reported ending fund balances of $7,602,901. 100% of the fund balance has spending constraints placed on the purpose for which resources can be used. The total fund balance of the general fund of the Library decreased by $280,276 during the current fiscal year. A key factor in the change is an increase in capital outlay. The total fund balance of the FPL Foundation fund decreased by $1,107,792 during the current fiscal year. A key factor in the change is an increase in debt service payments. Capital Assets At the end of 2024, the Library had $33,149,885 investment in capital assets, as detailed in Note 4 to the financial statements, an increase of $23,737. The increase is primarily due to capital assets additions of $2,314,900 and depreciation expense of $2,220,798. Long-Term Debt At the end of 2024, the Foundation had total debt outstanding of $581,347. This is a decrease of $4,871,840 from 2023 mainly due to accelerated principal reduction on the outstanding debt due to amounts received on pledges. Budgetary Highlights Differences between the final budget and the actual results (budgetary basis) as reported on page 24 can be briefly summarized as follows: • Total revenues were over budget by 6.7%. • Total expenditures were under budget by 15.9%. • Overall change in fund balance was a decrease of $260,083. 38 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Management’s Discussion and Analysis December 31, 2024 8 Economic Factors and Next Year’s Budget Economic conditions for the Library continued to show improvement compared to 202 4. Assessed value for total property used for property tax revenue for the Library has shown stable growth throughout the years and continued to increase by 10.2% in 2024. The Library’s adopted operating budget for 2025 was decreased to $14.0 million, which was a $2.3 million decrease from the 2024 budget. Revenues in the 2025 budget decrease approximately $1.7 million from the 2024 budget. These changes were primarily due to 2024 grant revenue and expenditures not expected to be repeated in 2025 and a decrease in property tax revenues in 2025. The Library continues to face uncertain economic conditions in 2025. However, even though future economic conditions remain unclear at this time, the administration of the Library feels confident that the economic future of the Library remains very bright in the long run. Contacting the Library’s Financial Management This financial report is designed to provide a general overview of the Library’s finances for all those with an interest in them. Questions concerning any of the information provided in this report or requests for additional financial information should be mailed to the following address: Office of the Director of Financial Services Fayetteville Public Library 401 W. Mountain Fayetteville, AR 72701 39 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Governmental Funds Balance Sheet/Statement of Net Position (With Summarized Comparative Financial Information for the Statement of Net Position for the Year Ended December 31, 2023) December 31, 2024 See Notes to Financial Statements 9 General Fund FPL Foundation Fund Total Adjustments Statement of Net Position 2023 Summarized Statement of Net Position ASSETS Cash and cash equivalents 3,983,451$ 1,945,227$ 5,928,678$ -$ 5,928,678$ 5,255,468$ Investments 2,577,626 195,262 2,772,888 - 2,772,888 3,471,226 Accounts receivable 245,065 - 245,065 - 245,065 87,231 Property taxes receivable, net 10,353,216 - 10,353,216 - 10,353,216 9,336,343 Pledges receivable, net - 148,227 148,227 - 148,227 1,636,216 Grants receivable 47,476 - 47,476 - 47,476 245,517 Other receivable 16,056 16,056 - 16,056 3,354 Accrued interest receivable 14,945 1,485 16,430 - 16,430 33,600 Due from other funds 533,802 - 533,802 (533,802) - - Prepaid expense 118,085 10,626 128,711 - 128,711 127,082 Long-term note receivable - 460,479 460,479 - 460,479 467,408 Restricted Cash and cash equivalents - 1,171,061 1,171,061 - 1,171,061 1,774,705 Investments - 4,320,314 4,320,314 - 4,320,314 4,938,981 Accrued interest receivable - 11,438 11,438 - 11,438 10,122 Capital assets, net - - - 33,149,885 33,149,885 33,126,148 Total Assets 17,889,722$ 8,264,119$ 26,153,841$ 32,616,083$ 58,769,924$ 60,513,401$ 40 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Governmental Funds Balance Sheet/Statement of Net Position (With Summarized Comparative Financial Information for the Statement of Net Position for the Year Ended December 31, 2023) December 31, 2024 (Continued) See Notes to Financial Statements 10 General Fund FPL Foundation Fund Total Adjustments Statement of Net Position 2023 Summarized Statement of Net Position LIABILITIES Accounts payable 160,626$ 1,636$ 162,262$ -$ 162,262$ 490,812$ Accrued expenses 104,463 9,911 114,374 412,947 527,321 568,121 Due to other funds - 533,802 533,802 (533,802) - - Notes payable - - - 581,347 581,347 5,453,187 Unearned revenue 504,982 5,000 509,982 - 509,982 412,840 Total Liabilities 770,071 550,349 1,320,420 460,492 1,780,912 6,924,960 DEFERRED INFLOWS OF RESOURCES Unavailable revenue – property taxes 9,782,102 - 9,782,102 (9,782,102) - - Unavailable revenue – contributions - 110,869 110,869 (110,869) - - Total Deferred Inflows of Resources 9,782,102 110,869 9,892,971 (9,892,971) - - FUND BALANCES/NET POSITION Fund balances Nonspendable Prepaid expense 118,085 - 118,085 (118,085) Permanent endowment - 1,250,000 1,250,000 (1,250,000) Restricted - 3,880,368 3,880,368 (3,880,368) Assigned - 2,472,533 2,472,533 (2,472,533) Unassigned 7,219,464 - 7,219,464 (7,219,464) Total Fund Balances 7,337,549 7,602,901 14,940,450 (14,940,450) Total Liabilities, Deferred Inflows, and Fund Balances 17,889,722$ 8,264,119$ 26,153,841$ (24,372,929)$ NET POSITION Net investment in capital assets 32,568,538$ 32,568,538$ 27,596,672$ Restricted for capital assets Expendable 73,864 73,864 52,638 Nonexpendable 500,000 500,000 500,000 Restricted for debt service Expendable 3,025,392 3,025,392 2,734,041 Restricted for children’s library Nonexpendable 750,000 750,000 750,000 Restricted for the volunteer program Expendable 556,527 556,527 511,612 Restricted for NEH Grant Expendable 3,249,977 3,249,977 3,061,787 Unrestricted 16,264,714 16,264,714 18,381,691 Total Net Position 56,989,012$ 56,989,012$ 53,588,441$ 41 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Statement of Governmental Funds Revenues, Expenditures and Changes in Fund Balances/Statement of Activities (With Summarized Comparative Financial Information for the Statement of activities For The Year Ended December 31, 2023) December 31, 2024 See Notes to Financial Statements 11 General Fund FPL Foundation Fund Total Adjustments Statement of Activities 2023 Summarized Statement of Activities Revenues Contributions From primary government 2,618,401$ -$ 2,618,401$ -$ 2,618,401$ 3,281,401$ Capital campaign – expansion - 3,597,861 3,597,861 (1,016,307) 2,581,554 451,134 Other 101,251 58,361 159,612 - 159,612 120,118 Property taxes 8,872,183 - 8,872,183 942,036 9,814,219 9,223,129 Investment income 242,792 571,072 813,864 - 813,864 796,829 Fines and fees 82,398 - 82,398 - 82,398 102,915 Grant revenue 732,022 516,806 1,248,828 - 1,248,828 1,358,378 State aid 168,167 - 168,167 - 168,167 164,462 Insurance proceeds - 289,522 289,522 (289,522) - - Miscellaneous 473,878 180,303 654,181 - 654,181 747,165 Total Revenues 13,291,092 5,213,925 18,505,017 (363,793) 18,141,224 16,245,531 Expenditures/Expenses Current Personnel services 5,707,992 205,434 5,913,426 32,667 5,946,093 5,618,253 Services and charges 1,633,610 - 1,633,610 - 1,633,610 1,815,506 Materials and supplies 943,062 - 943,062 - 943,062 756,192 Maintenance 176,064 - 176,064 - 176,064 365,419 Public relations - 25,940 25,940 - 25,940 15,018 Depreciation - - - 2,220,798 2,220,798 2,123,030 Other 66,384 593,633 660,017 - 660,017 695,520 Loss on fire event 348,920 - 348,920 (219,157) 129,763 - Transfers to primary government 2,853,191 - 2,853,191 - 2,853,191 2,658,269 Capital outlay 2,314,900 - 2,314,900 (2,314,900) - - Debt Service Principal - 4,871,840 4,871,840 (4,871,840) - - Interest - 152,115 152,115 - 152,115 254,799 Total Expenditures/Expenses 14,044,123 5,848,962 19,893,085 (5,152,432) 14,740,653 14,302,006 Excess (Deficiency) of Revenues Over Expenditures (753,031) (635,037) (1,388,068) 4,788,639 3,400,571 - Other Financing Sources (Uses) Transfers – internal activities 472,755 (472,755) - - - - Total Other Financing Sources (Uses)472,755 (472,755) - - - - Net Change in Fund Balances (280,276) (1,107,792) (1,388,068) 1,388,068 3,400,571 - Change in Net Position - - - 3,400,571 3,400,571 1,943,525 Fund Balances/Net Position Beginning of the year 7,617,825 8,710,693 16,328,518 38,006,915 53,588,441 51,644,916 End of Year 7,337,549$ 7,602,901$ 14,940,450$ 42,795,554$ 56,989,012$ 53,588,441$ 42 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 12 Nature of Operations and Summary of Significant Accounting Policies Nature of Operations and Reporting Entity Fayetteville Public Library (Library) is located in Fayetteville, Arkansas. The Library is a component unit of the City of Fayetteville, Arkansas (City). The Mayor of the City appoints all seven members of the Library’s board of trustees and the City provides the Library with financial assistance and a major portion of the Library’s budget. The accompanying financial statements present the Library and its component unit, an entity for which the Library is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the Library’s operations. Blended Component Unit. Fayetteville Public Library Foundation (Foundation) provides fundraising for the Library and is governed by a board comprised of members appointed by the board of trustees of the Library. The Foundation is reported as the Library’s other major governmental fund. Complete financial statements of the Foundation may be obtained from the office of its Director of Development at 401 W. Mountain, Fayetteville, Arkansas. Measurement Focus, Basis of Accounting, and Presentation Government-Wide Financial Statements The government-wide financial statements of the Library have been prepared on the accrual basis of accounting using the economic resources measurement focus. Revenues, expenses, gains, losses, assets, and liabilities from exchange and exchange-like transactions are recognized when the exchange transaction takes place, while those from government-mandated nonexchange transactions (principally grants and property taxes) are recognized when all applicable eligibility requirements are met. Revenues and expenses include exchange transactions and program-specific, government-mandated nonexchange transactions. The Library first applies restricted net position when an expense or outlay is incurred for purposes for which both restricted and unrestricted net position are available. Fund Financial Statements Fund financial statements provide information about the Library’s funds. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when they are both measurable and available. “Available” means collectible within the current period or soon enough thereafter to pay current liabilities. The Library considers revenues to be available if the revenues are collected within 60 days after year -end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long -term debt, claims and judgments and compensated absences, which are recognized as expenditures when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Major revenue sources susceptible to accrual include property taxes and grants. Fund Accounting The financial activities of the Library are recorded in individual funds. A fund is a separate accounting entity with a self-balancing set of accounts. The Library uses fund accounting to report on its financial position and results of operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. 43 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 13 The Library reports the following major governmental funds: General Fund – This is the Library’s primary operating fund. It accounts for all financial resources of the general government. Fayetteville Public Library (FPL) Foundation Fund – This fund accounts for restricted and unrestricted contributions and other funds of the Library not included in the General Fund . Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and deferred inflows/outflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses , and other changes in net position during the reporting period. Actual results could differ from those estimates. Cash Equivalents The Library considers all liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2024, cash equivalents consisted of money market funds with brokers. Restricted cash equivalents consist of those short-term liquid investments held for use by the Library that have been limited by donors to a specific time period or purpose. Property Taxes Property taxes are levied each November 1 on the assessed value listed as of January 1 for all real and personal property. The property tax is considered due on the first Monday in February (the lien date) after the levy; however, the tax is not considered delinquent until October 16 of that year. As a result, the majority of the tax is not collected within the time frame necessary to finance the liabilities of the current period . Property taxes, which remain delinquent for a period of three years, are certified to the land commissioner where a lien is recorded and held on file. If property taxes remain delinquent for a period of seven years, the property will be subsequently sold by the land commissioner. In the governmental funds, property taxes are measurable when levied even though not available. As a result, at December 31, 2024, property taxes receivable of $10,353,216 and related deferred inflows of resources of $9,782,102 have been recorded in the governmental funds. In the government-wide statement of net position, property taxes are considered earned at the time levied. In addition to property taxes levied, any delinquent taxes are recorded net of amounts considered uncollectible. The appraised value of taxable property upon which the property tax is levied is determined by the county assessor. The assessor estimates full market value of the property and applies the statutory rate of 20% to arrive at assessed value. During August 2016, the City of Fayetteville, Arkansas , held a special election related to an increase in property taxes for the benefit of the Library. An increase of one and one-half (1.5) mills was passed as it relates to the maintenance and operation of Fayetteville Public Library. In addition, a separate tax of one and two-tenths (1.2) mills was passed to be pledged to the issuance of bonds not to exceed $26,500,000 to finance capital improvements to Fayetteville Public Library. These bonds were issued in June 2017. Property taxes of $3,025,392 for the 1.2 mills are included in the property tax receivable of $10,353,216 and are shown as restricted for debt service on the statement of net position. 44 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 14 Pledges Receivable Pledges receivable consist of promises to give made by donors. Pledges receivable are recorded net of estimated uncollectible amounts and discounted to present value for pledges due in more than one year. The Foundation provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Notes Receivable Notes receivable consist of amounts due from sale of property. Notes receivable are recorded net of estimated uncollectible amounts. The Foundation provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information , and existing economic conditions. Investments and Investment Income Investments in U.S. Treasury, agency, and instrumentality obligations with a remaining maturity of one year or less at time of acquisition and in nonnegotiable certificates of deposit are carried at amortized cost. All other investments are carried at fair value. Fair value is determined using quoted market prices. Restricted investments consist of those investments held for use by the Library that have been limited by donors to a specific time period or purpose. Investment earnings include dividend and interest income, realized gains and losses on investments carried at other than fair value and the net change for the year in the fair value of investments carried at fair value. Capital Assets Capital assets are recorded at cost at the date of acquisition, or acquisition value at the date of donation if acquired by gift. Depreciation is computed using the straight-line method over the estimated useful life of each asset. The following estimated useful lives are being used by the Library: Film 5 years Books and publications 3–10 years Software 5–10 years Equipment 5–15 years Furniture and fixtures 5–20 years Buildings 30–50 years Collections All collections of works of art, historical treasures, and similar assets are capitalized. Items added to the collections are capitalized at cost if purchased or at estimated acquisition value on the acquisition date if donated. Collection items sold or removed are reported as unrestricted or temporarily restricted gains or losses depending on donor stipulations, if any, placed on the items at the time of acquisition. These collections are considered inexhaustible and have extraordinarily long useful lives, and as such, these items are not depreciated. Compensated Absences Library policies permit most employees to accumulate leave with pay benefits that may be realized as paid time off or, in limited circumstances, as a cash payment. The Library’s policy is that leave earned in the current year is used prior to leave earned in a previous period. Expenses and the related liability are recognized when it is more likely than not that leave will be taken or settled through cash payments . Compensated absence liabilities are computed using the regular pay rates in effect at the balance sheet date plus an additional amount for 45 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 15 compensation-related payments such as social security and Medicare taxes computed using rates in effect at that date. The estimated compensated absences liability is included in accrued expenses on the statement of net position. Deferred Outflows of Resources and Deferred Inflows of Resources A deferred inflow of resources is an acquisition of net position by the Library that is applicable to a future reporting period and a deferred outflow of resources is a consumption of net position by the Library that is applicable to a future period. Both deferred inflows and outflows are reported in the statement of net position but are not recognized in the financial statements as revenues and e xpenditures until the period(s) to which they relate. The governmental funds report unavailable revenues from two sources: property taxes and contributions. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The statement of net position reports unavailable revenue from contributions only due to time restrictions. Net Position Net position of the Library is classified in four components. Net investment in capital assets consist of capital assets net of accumulated depreciation and reduced by the outstanding balances of borrowings used to finance the purchase or construction of those assets. Restricted expendable net position is noncapital assets that must be used for a particular purpose as specified by creditors, grantors, or donors external to the Library. Restricted nonexpendable net position is noncapital assets whose restrictions are permanent in nature as specified by donors external to the Library. Unrestricted net position is remaining assets and deferred outflows less remaining liabilities and deferred inflows that do not meet the definition of net investment in capital assets, restricted expendable, or restricted nonexpendable. When both restricted and unrestricted resources are available for use, it is the Library’s policy to use restricted resources first, then unrestricted resources as they are needed. Fund Balance – Governmental Funds The fund balances for the Library’s governmental funds are displayed in four components: Nonspendable – Nonspendable fund balances are not in a spendable form or are required to be maintained intact. Restricted – Restricted fund balances may be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may be changed or lifted only with the consent of resource providers. Assigned – Assigned fund balances include amounts intended to be used for specific purposes as specified by the Foundation’s management or governing board. Unassigned – Unassigned fund balance is the residual classification for the general fund and includes all amounts not contained in the other classifications. The Library considers restricted amounts to have been spent when an expenditure is incurred for purposes for which both restricted and unassigned fund balance is available. The Library applies restricted amounts first and then unassigned amounts when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. 46 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 16 Income Taxes The Foundation is exempt from income taxes under section 501 of the Internal Revenue Code and similar provision of state law. However, the Foundation is subject to federal income tax on any unrelated business taxable income. The Foundation files tax returns in the U.S. Federal Jurisdiction. Reconciliation of Fund Financial Statements to Government-Wide Financial Statements Total fund balances and the net change in fund balances of the Library’s General Fund and the FPL Foundation Fund differs from net position and change in net position of the governmental activities reported in the statement of net position and statement of activities. These differences primarily result from the long-term economic focus of the statement of net position and statement of activities versus the current financial resources focus of the governmental fund balance sheet and the statement of revenues, expenditures, and changes in fund balances. The following are reconciliations of fund balances to net position and the net change in fund balances to the net change in net position: Total fund balances 14,940,450$ Amounts reported in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.33,149,885 Amounts reported as deferred inflows of resources are not recognized at the fund level on the modified accrual basis are reported as revenues on the full accrual basis in the government-wide financial statements.9,892,971 Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Accrued compensated absences (412,947) Notes payable (581,347) Total net position 56,989,012$ 47 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 17 Change in fund balances (1,388,068)$ Amounts reported in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, for government-wide statements, the costs of those assets are allocated over estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.23,737 Contribution revenues that do not provide current financial resources are not reported as revenues for the funds but are reported as revenues in the statement of activities.(1,016,307) Property tax revenues that do not provide current financial resources are not reported as revenues for the funds but are reported as revenues in the statement of activities.942,036 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment consumes current financial resources. Neither transaction has any effect on net position. This amount is the net effect of these differences in the treatment of long-term debt.4,871,840 Accrued expenses, such as compensated absences reported in the statement of activities do not require the use of current financial resources and, therefore, are not expenditures in the funds.(32,667) Change in net position 3,400,571$ Deposits, Investments, and Investment Income Deposits Custodial credit risk is the risk that in the event of a bank failure, a government’s deposits may not be returned to it. State law requires collateralization of all deposits of public funds with federal depository insurance, bonds and other obligations of the U.S. Treasury, U.S. agencies, or instrumentalities of the State of Arkansas. No legal opinion has been obtained regarding the enforceability of any of the collateral arrangements. Library The Library’s deposit policy for custodial credit risk requires compliance with the provisions of state law. At December 31, 2024, the Library had bank balances of $1,277,174 that were all insured (FDIC) or collateralized with securities held by the Library or the Library’s agents in the Library’s name. The carrying value of these deposits as of December 31, 2024 was $1,302,043. 48 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 18 Foundation The Foundation’s deposit policy for custodial credit risk requires compliance with the provisions of state law. At December 31, 2024, bank balances of $547,275 were all insured (FDIC) or collateralized with securities held by the Foundation or the Foundation’s agent in the Foundation’s name . The carrying value of these deposits as of December 31, 2024 was $609,794. Investments Library The Library may legally invest in direct obligations of the U.S. Government and agencies, collateralized certificates of deposit, prerefunded municipal bonds, corporate bonds, collateralized repurchase agreements, treasury money markets, local government trusts, and savings accounts. The Library had the following investments and maturities at December 31, 2024: Less Than 1 U.S. treasury obligations 1,885,365$ 1,659,307$ 226,058$ -$ Money market mutual funds 2,641,499 2,641,499 - - Corporate bonds 614,493 317,819 296,674 - 5,141,357$ 4,618,625$ 522,732$ -$ Maturities in Years Type Fair Value 1–5 6–10 In compliance with GASB Statement No. 72, Fair Value Measurement and Application, the Library categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles . The hierarchy is based on the valuation inputs used to measure the fair value of the asset . Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The Library had the following recurring fair value measurements as of December 31, 2024: • U.S. treasury obligations of $1,885,365 are valued using quoted market prices (Level 1 inputs). • Money market mutual funds of $2,641,499 are valued using quoted market prices (Level 1 inputs). • Corporate bonds of $614,493 are valued using quoted market prices (Level 1 inputs). Interest Rate Risk – As a means of limiting its exposure to fair value losses arising from rising interest rates, the Library’s investment policy attempts to match investment maturities with cash flow requirements. Money market mutual funds are used to meet the short-term cash flow needs of the Library. Other investments are allowed within a range of maturities of 90 days to 10 years and over. Some of the Library’s investments have maturities over five years to maximize interest earnings. Custodial Credit Risk – For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Library will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. The Library’s investment policy does not address custodial credit risk. 49 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 19 Credit Risk – Credit risk is the risk that the issuer or other counterparty to an investment will not fulfill its obligations. It is the Library’s policy to invest no more than 20% in corporate debt or in securities of a management type investment company or investment trust. It is the Library’s policy to limit its investments in corporate bonds to issues that are rated investment grade by Standard & Poor’s and Moody’s Investors Service and shall maintain an A- average rating or better for Standard & Poor’s and an A3 average rating or better for Moody’s Investors Service. Investment in commercial paper will be rated A-1/P-1. At December 31, 2024, the Library’s investments in U.S. agencies obligations and corporate bonds were rated an average rate of AA by Standard & Poor rating and an average rate of Aa1 by Moody’s Investors Service. Concentration of Credit Risk – The Library’s policy states that investments shall be diversified by limiting investments to avoid concentration in securities from a specific issuer less than or equal to 5% of the cost basis of the Library’s portfolio at the time of purchase. Foundation The Foundation had the following investments and maturities at December 31, 2024: Less than 1 Corporate bonds 1,036,130$ 19,845$ 877,683$ 138,602$ Money market mutual funds 2,506,494 2,506,494 - - U.S. treasury obligations 675,030 412,350 262,680 - 4,217,654 2,938,689$ 1,140,363$ 138,602$ Corporate stocks 2,409,429 Exchange-traded funds 219,969 Certificates of deposit 46,846 Mutual funds 128,172 7,022,070$ 6–10 Type Fair Value 1–5 Maturities in Years In compliance with GASB 72, the Foundation categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The Foundation had the following recurring fair value measurements as of December 31, 2024: • Corporate bonds and stocks of $1,036,130 and $2,409,429, respectively, are valued using quoted market prices (Level 1 inputs). • Money market mutual funds and mutual funds of $2,506,494 and $128,172, respectively, are valued using quoted market prices (Level 1 inputs). • Exchange-traded funds of $219,969 are valued using quoted market prices (Level 1 inputs). • Certificates of deposit of $46,846 are valued using observable inputs for similar securities (Level 2 inputs). • U.S. agency obligations of $675,030 are valued using quoted market prices (Level 1 inputs). 50 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 20 Interest Rate Risk – As a means of limiting its exposure to fair value losses arising from rising interest rates, the Foundation’s investment policy limits its investment fixed income portfolio to maturities of no more than 10 years or non-public in nature. Credit Risk – Credit risk is the risk that the issuer or other counterparty to an investment will not fulfill its obligations. It is the Foundation’s policy to limit its investments in corporate bonds to issues that are rated investment grade by Standard & Poor’s and Moody’s Investors Service and shall maintain an A+ average rating or better for Standard & Poor’s and an A1 average rating or better for Moody’s Investors Service. At December 31, 2024, the Foundation’s investments in U.S. agencies obligations and corporate bonds were rated an average rate of A by Standard & Poor rating and an average rate of A1 by Moody’s Investors Service. Custodial Credit Risk – For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Foundation will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. The Foundation’s investment policy does not address custodial credit risk. Concentration of Credit Risk – The Foundation’s investment policy dictates that except for U.S. Treasury or agency obligations, the Foundation’s investment portfolio shall contain no more than 5% exposure to any issuer. Summary of Carrying Values The carrying values of deposits and investments shown above are included in the statement of net position as follows: Carrying value Library Deposits 1,338,877$ Cash on hand 3,074 Investments 5,219,126 Foundation Deposits 588,294 Cash on hand 21,500 Investments 7,022,070 14,192,941$ Included in the following statement of net position captions Cash and cash equivalents 5,928,678$ Restricted cash and cash equivalents 1,171,061 Investments 2,772,888 Restricted investments 4,320,314 14,192,941$ 51 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 21 Investment Income Investment income consisted of the following for the year ended December 31, 2024: Interest and dividend income 443,161$ Net increase in fair value of investments 370,703 813,864$ Capital Assets Capital assets activity was as follows for the year ended December 31, 2024: Ending Transfers Balance Land 2,029,755$ -$ -$ -$ 2,029,755$ Buildings 33,039,099 - (47,704) - 32,991,395 Software 359,669 - (137,887) - 221,782 Books and publications 7,001,438 545,207 (4,925,947) - 2,620,698 Furniture, fixtures, and equipment 10,290,379 1,769,693 (1,382,608) 93,116 10,677,464 Library-owned art 1,008,291 - - - 1,008,291 Film 180,000 - - - 180,000 Construction in progress 93,116 - - (93,116) 93,116 54,001,747 2,314,900 (6,494,146) - 49,822,501 Less accumulated depreciation Buildings 8,896,516 660,659 (30,141) - 9,527,034 Software 179,168 36,459 (136,505) - 79,122 Books and publications 6,144,444 501,716 (4,925,947) - 1,720,213 Furniture, fixtures, and equipment 5,475,471 1,021,964 (1,331,188) - 5,166,247 Film 180,000 - - - 180,000 20,875,599 2,220,798 (6,423,781) - 16,672,616 Capital assets, net 33,126,148$ 94,102$ (70,365)$ -$ 33,149,885$ Beginning Balance Additions Reductions 52 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 22 Long-Term Loan Foundation The Foundation had a $7,486,532 promissory note maturing on June 1, 2027, with annual principal payments of $500,000. At December 31, 2024, there was $581,347 outstanding on this loan. See rollforward below. The loan is collateralized by all pledges of the Foundation. Interest was 3.95% at December 31, 2024 and is payable monthly. Debt Outstanding Balance at December 31, 2023 Payments Balance at December 31, 2024 Generations Bank Loan 5,453,187$ 4,871,840$ 581,347$ The following is a schedule of remaining debt service payments to maturity on an annual basis: Year Ending Principal Interest Total 2025 500,000$ 19,750$ 519,750$ 2026 81,347 3,213 84,560 581,347$ 22,963$ 604,310$ Interfund Transfers During the year ended December 31, 2024, the following transfers were made between the Library and the Foundation: • $118,246 transfer of funds from the Foundation to the Library for payments relating to investments • $64,987 transfer of funds from the Foundation to the Library related to federal grant funds Pension Plan The Library contributes to a defined contribution pension plan covering substantially all employees. Pension expense is recorded for the amount of the Library’s required contributions, determined in accordance with the terms of the plan. The plan is administered by Bank of Arkansas Wealth Management. The plan provides retirement benefits to plan members and their beneficiaries. Benefit provisions are contained in the plan document and were established and can be amended by action of the Library’s governing body. Plan members were required to contribute, at a minimum, 3% of covered payroll up to a maximum of $19,500 for 2024. The Library’s contribution is a discretionary 6% to 12% of each participant’s annual compensation and both the employer and employee contributions are immediately fully vested. Contributions actually made during 202 4 by plan members and the Library aggregated $312,678 and $357,632, respectively. 53 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 23 Risk Management The Library is exposed to various risks of loss from torts; theft of, damage to , and destruction of assets; business interruption; errors and omissions; employee injuries and illnesses; natural disasters; and employee health, dental, and accident benefits. Commercial insurance coverage is purchased for claims arising from such matters. Settled claims have not exceeded this commercial coverage in any of the three preceding years. Foundation Endowments and Similar Funds The Foundation’s board of directors has established an investment policy with the objective of protecting the principal of these investments and maximizing total investment return without assuming extraordinary risks. It is the goal of the Foundation to provide spendable income levels that are reasonably stable and sufficient to ensure a proper balance between the preservation of corpus and enhancement of the purchasing power of investment earnings. As of December 31, 2024, the Foundation had a total of $73,864 of net appreciation from investment of donor-restricted endowments available for expenditure. This amount is reported in restricted fund balance in the governmental fund balance sheet and in various categories of expendable restricted net position on the statement of net position. The laws of the State of Arkansas do not currently restrict the Foundation’s ability to spend net appreciation on donor-restricted endowment funds. 54 Required Supplementary Information 55 Fayetteville Public Library A Component Unit of the City of Fayetteville, Arkansas Budgetary Comparison Schedule and Notes to Required Supplementary Information Budgetary Basis Year Ended December 31, 2024 24 GAAP Budgetary Final Budget- Budgetary Basis Basis Basis Variance Revenues Contributions From primary government 2,618,401$ $ 2,618,401 $ 2,618,401 -$ 2,618,401$ -$ From Foundation - - 472,755 - 472,755 472,755 Other 4,000 - 101,251 - 101,251 101,251 Property taxes 8,543,097 8,543,097 8,872,183 - 8,872,183 329,086 Investment income - - 242,792 - 242,792 242,792 Fines and fees 62,700 62,700 82,398 - 82,398 19,698 Grant revenue 305,000 499,750 732,022 - 732,022 232,272 State aid 141,150 141,152 168,167 - 168,167 27,015 Miscellaneous 725,500 725,500 473,878 20,193 494,071 (231,429) Total Revenues 12,399,848 12,590,600 14,112,767 20,193 14,132,960 1,542,360 Expenditures Current Personnel services 5,881,535 5,935,889 5,707,992 - 5,707,992 (227,897) Materials and supplies 2,863,447 3,016,599 943,062 - 943,062 (2,073,537) Services and charges 1,819,919 2,040,339 1,633,610 - 1,633,610 (406,729) Maintenance 157,455 189,088 176,064 - 176,064 (13,024) Other - - 66,384 - 66,384 66,384 Transfers to primary government 2,809,000 2,809,000 2,853,191 - 2,853,191 44,191 Other 270,500 284,489 - - - (284,489) Capital outlay 1,884,385 2,013,303 2,314,900 - 2,314,900 301,597 Total Expenditures 15,686,241 16,288,707 13,695,203 - 13,695,203 (2,593,504) Excess of Revenues Over (Under) Expenditures (3,286,393) (3,698,107) 417,564 20,193 437,757 4,135,864 Change in Fund Balances (3,286,393) (3,698,107) 417,564 20,193 437,757 4,135,864 Fund Balances, Beginning of Year 7,617,825 7,617,825 7,617,825 - 7,617,825 - Fund Balances, End of Year 4,331,432$ 3,919,718$ 8,035,389$ 20,193$ 8,055,582$ 4,135,864$ Original Final Adjustments Budgets and Budgetary Accounting The annual budget is prepared on the modified accrual basis for revenues and expenditures and adopted by the Library board of trustees. Subsequent amendments are approved by the board. Budgetary control is maintained at the Library program level. The budgetary basis used for budget purposes excludes the revenues and expenditures of the Foundation since it is a blended component unit of the Library and does not adopt an annual budget. 56 Forvis Mazars, LLP is an independent member of Forvis Mazars Global Limited Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditor’s Report Board of Trustees Fayetteville Public Library Fayetteville, Arkansas We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities and each major fund of the Fayetteville Public Library, as of and for the year ended December 31, 2024, and the related notes to the financial statements, and have issued our report thereon dated August 6, 2025. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the entity’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we do not express an opinion on the effectiveness of the entity’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the entity’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. 57 Board of Trustees Fayetteville Public Library 26 The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Rogers, Arkansas August 6, 2025 58 59 60 61 62 63