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Business and Finance

BUSINESS ADMINISTRATION PURPOSE

Business management exists for the sole purpose of facilitating the achievement of the basic objective of the library program. Effective business management must begin with an objective, a goal to reach, a project to complete, a service to perform. Management's efforts are directed toward attaining this objective as efficiently and economically as possible. Those involved in business management must have a real understanding of the aims and problems of the library system. The carrying out of assigned responsibilities contributes directly in the development of the program. The basic functions of business management in the Ann Arbor library district include planning, organizing, controlling, coordinating, directing, reporting and staffing to insure adequate protection of the library system's assets.

Policy adopted by the Ann Arbor District Library Board December 12, 1995

BUDGET ADJUSTMENT POLICY

For the Board budget adjustment process that occurs after June 30 or budget adjustments that require Board action:

The Director shall provide the Board with an up-to-date organizational chart for all budget(s). The chart shall contain the budget manager's position, area covered, and budget or budget(s), and the budget amounts.
The Board shall set a date that the Director shall provide the Board with his/her recommended plan as well as his/her alternative plan(s).
The Director shall then submit to the Board plans that shall accomplish the overall district goals of budget adjustments and complies with all district policies. The Director shall sign and date the plan that she/he recommends to the Board.
The details of the plan submitted by the Director shall be available for review at the request of the Board or an individual Board member.
The Board shall then discuss in an open meeting all aspects of the budget adjustments and take necessary action.

Policy adopted by the Ann Arbor District Library Board December 12, 1995

BUDGET POLICY

With respect to fiscal planning, the Director may not jeopardize either programmatic or fiscal integrity of the district. Accordingly he or she may not cause or allow budgeting which:

Plans the expenditure in any fiscal year of more funds than are projected to be received in that period.
Deviates from board-stated mission, goals, and annual priorities in its allocation among competing budgetary needs.
Permits waste, inefficiencies, or unnecessary duplication of efforts/services within operating units of the district.
Causes overall spending of the district to increase faster than growth of the community served by the district.
Fails to provide fair and equitable wages for all employees and benefits for all regular or part time regular employees.
Depletes board-mandated cash reserves intended to meet unexpected and/or extraordinary financial needs of the district.
Fails to provide for proper maintenance and replacement of the physical plant, equipment, and systems throughout the district, resulting in an unfavorable or inadequate learning or working environment for our patrons and employees.
Favors ongoing activities over potential new programs or approaches which may be more cost-effective or better meet the board-stated mission, goals, and annual priorities.
Creates inequitable distribution of resources within the district.
Does not consider activities or spending of district funds for operations or services that could be more effectively and economically provided by other agencies of government or the private sector.
Discourages independent budget decision-making at the appropriate administrative level.
Contains too little detail to enable reasonably accurate projection of revenues and expenses, separation of capital and operational items, cash flow, and subsequent audit trails. (Alternatively, contains too much detail to enable reasonable people to get the big picture of how money is spent.)
Fails to examine on a periodic basis (no longer than every five years) every detail in each budget category for potential economies.
Does not involve in an active and meaningful way broad constituencies within the community in the design and development of the annual budget and budget priorities.

Ann Arbor District Library Board directs the Director to make all necessary plans and preparations to disseminate and implement these policies in order of priority and to bring to the Ann Arbor District Library Board and the community such items as require Board or community approval to advance these district policies.

Policy adopted by the Ann Arbor District Library Board December 12, 1995 Revisions adopted June 19, 2006

INVESTMENT POLICY -- GENERAL OPERATING FUND

Scope

This Investment policy applies to all financial assets of the Ann Arbor District Library (AADL) including the General Operating Fund, except assets encompassed by the Strategic Fund Equity, unless specifically exempted by resolution of the Board. The General Operating Fund is defined as all annual recurring, unallocated revenues received by Ann Arbor District Library, including but not limited to tax receipts, penal fines, state aid, rental income, DDA, and interest from the Strategic Fund Equity.

Objectives

The primary objectives of the investment policies and practices of AADL assets must be to ensure the safety and relative liquidity of those assets consistent with social responsibility. Safety and liquidity involve more than those investment vehicles and financial institutions eligible under legal statute. Prudent consideration must be given to the objectives of those statutes; which are the security of public monies and the availability of those monies to complete the charter mission of AADL. Secondary to safety and liquidity of AADL assets is the return on investment. Subject to the constraints of safety and relative liquidity, AADL will strive to maximize the return on eligible legal investment instruments.

Delegation of Authority

The responsibility for depositing AADL funds and conducting investment transactions shall reside with the Finance Manager in consultation with the Director, Ann Arbor District Library. This shall include the ability to move funds from one institution to another in order to gain a better return.

Authorized Institutions

The Board of Trustees of the Ann Arbor District Library, after the solicitation for bids from eligible institutions, shall select one or more institutions as its primary depository(ies). Eligible institutions shall be reexamined every three (3) years unless specifically exempted by Board resolution. To qualify, the eligible institutions must have a satisfactory rating as determined by the Bauer Financial rating service.

Authorized Investments

Ann Arbor District Library may invest in the following types of securities:

Bonds, bills, or notes of the United States in which the principal and interest is fully guaranteed by the United States, or obligations of the state.
Certificate of deposit by a state or national bank, savings accounts of a state of federal savings and loan association, or certificates of deposit or share certificates of a state or federal credit union organized and authorized to operate in this state.
Commercial paper rated prime at time of purchase and maturing no more than 270 days after date of purchase.
Securities issued or guaranteed by agencies or instrumentalities of the United States government.
Bankers’ acceptances issued by FDIC member banks.
Mutual funds composed of eligible investment vehicles.
United States government or federal agency obligation repurchase agreements.
Investments pools composed entirely of eligible instruments.

Investments are restricted to in any one single issue or obligation of $1,000,000 or less except for the occasional accumulation of excess cash due to anticipated cash inflow or outflow requirements. The accumulation of excess cash in any one single issue or obligation in excess of $1,000,000 may not exceed ten (10) business days. Ann Arbor District Library investments must meet the limitations on security issues and issuers as detailed below:

b. Investment in commercial paper is restricted to those having a maturity of 270 days or less and, at a prime rating at time of purchase. No more than 33 percent of any fund may be invested in commercial paper at any time, including the relative weight of mutual fund commercial paper investments.

c. No financial transaction shall be conducted on behalf of the Library with an institution or agent not previously approved by the Board.

d. Money in the several funds of the Library shall not be commingled except that:

1. The Board may establish and maintain one (1) common debt retirement fund for issues of bonds of similar character.

2. The Board, by resolution, may authorize the Finance Manager to combine money from more than one (1) fund for the purpose of investment in an investment pool.

Safekeeping and Custody

A list will be maintained by the investment officer of financial institutions authorized to provide investment services. An annual review of the financial condition and registration of qualified financial institutions will be conducted by the investment officer. The investment officer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the AADL are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. Accordingly, the investment officer shall establish a process for an external auditor to assure compliance with policies and procedures. All applicable trades will be executed by delivery vs. payment (DVP) to ensure that securities are deposited with an eligible financial institution prior to the release of funds. Securities will be held by a third-party custodian, as evidenced by trade information.

Reporting

Investment reports shall be made to the Board on a quarterly basis. Quarterly reports shall include the amount and location of investments made on behalf of AADL. Monthly summarized updates of investments shall be included in the regular monthly financial reports to the Board and amended by the Finance Manager for needed changes.

Legal Requirements

This policy provides for investments within the parameters of the Michigan Surplus Funds Investment Act of 1982 and the amended School Code Act of 1986; Surplus Funds in Treasury Act 105 of 1855; Surplus Funds Investment Pool Act, Act 367 of 1982; Investment of Surplus Funds of Political Subdivisions, Public Act 20 of 1943; The District Library Establishment Act, Act 24 of 1989.

Policy adopted by the Ann Arbor District Library Board November 18, 1996 Revisions adopted March 16, 1998 and November 13, 2017

INVESTMENT POLICY -- STRATEGIC FUND EQUITY

Scope

This Investment policy applies to all financial assets of the Ann Arbor District Library (AADL) encompassed by the Strategic Fund Equity, unless specifically exempted by resolution of the Board. By definition, the Strategic Fund Equity are funds identified by the Board to be used for specific yet undefined programs which are outside the scope of the annual operating budget.

Objectives

The primary objective of the investment policies and practices of AADL assets must be to ensure the safety and relative liquidity of those assets consistent with social responsibility. Safety and liquidity involve more than those investment vehicles and financial institutions eligible under legal statute. Prudent consideration must be given to the objectives of those statutes; which is the security of public monies and the availability of those monies to complete the charter mission of AADL. Secondary to safety and liquidity of AADL assets is the return on investment. Subject to the constraints of safety and relative liquidity, AADL will strive to maximize the return on eligible legal investment instruments.

Delegation of Authority

The responsibility for depositing AADL funds and conducting investment transactions shall reside with the Finance Manager, in consultation with the Director, Ann Arbor District Library. This shall include the ability to move funds from one institution to another in order to gain a better return.

Authorized Institutions .

Authorized Investments Ann Arbor District Library may invest in the following types of securities:

Bonds, bills, or notes of the United States in which the principal and interest is fully guaranteed by the United States, or obligations of the state.
Certificate of deposit by a state or national bank, savings accounts of a state or federal savings and loan association, or certificates of deposit or share certificates of a state or federal credit union organized and authorized to operate in this state.
Commercial paper rated prime at time of purchase and maturing no more than 270 days after date of purchase.
Securities issued or guaranteed by agencies or instrumentalities of the United States government.
Bankers’ acceptances issued by FDIC member banks.
Mutual funds composed of eligible investment vehicles.
United States government or federal agency obligation repurchase agreements.
Investments pools composed entirely of eligible instruments.

Investments are restricted to in any one single issue or obligation of $1,000,000 or less. The accumulation of excess cash in any one single issue or obligation in excess of $1,000,000 may not exceed ten (10) business days. Ann Arbor District Library investments must meet the limitations on security issues and issuers as detailed below:

a. To the extent possible, the Ann Arbor District Library will attempt to match investments with anticipated cash flow requirements. Unless matched to a specific cash flow requirement, the Ann Arbor District Library will not directly invest Strategic Fund Equity revenue in securities maturing more ten (10) years from date of purchase; with the exception of securities that are a part of an investment fund structured with maturities of 120 days or less for at least 75 percent of the fund portfolio. Repurchase agreements may be collateralized using longer-dated investments not to exceed two (2) years to maturity. None of the library’s total investment portfolio shall be placed in securities maturing in more than ten (10) years.

b. Investment in commercial paper is restricted to those having a maturity of 270 days or less and at a prime rating at time of purchase. No more than 33 percent of any fund may be invested in commercial paper at any time, including the relative weight of mutual fund commercial paper investments.

c. No financial transaction shall be conducted on behalf of the Library with an institution or agent not previously approved by the Board.

d. Money in the several funds of the Library shall not be commingled except that:

1. The Board may establish and maintain one (1) common debt retirement fund for issues of bonds of similar character.

2. The Board, by resolution, may authorize the Finance Manager to combine money from more than one (1) fund for the purpose of investment in an investment pool.

Safekeeping and Custody

Reporting

Investment reports shall be made to the Board on a quarterly basis. Quarterly reports shall include the amount and location of investments made on behalf of AADL. Monthly summarized updates of investments shall be included in the regular monthly financial reports to the board and amended by the Finance Manager for needed changes.

Legal Requirements

Policy adopted by the Ann Arbor District Library Board November 18, 1996 Revision adopted March 16, 1998 and November 13, 2017

GIFT ACCEPTANCE POLICY

I. PURPOSE

The Library and its staff and the Board solicit current and deferred gifts from individuals, corporations and organizations to secure the future growth and mission of the Library. This Policy governs the acceptance of gifts by the Library and provides guidance to the Library and to prospective donors and their advisors when making gifts to the Library. The provisions of these policies shall apply to all gifts received by the Library for any of its programs or services.

II. CONFLICT OF INTEREST

The Library will urge all prospective donors to seek the assistance of personal legal and financial advisors in matters relating to their gifts and the resulting tax and estate planning consequences.

III. TYPES OF GIFTS ACCEPTED

A. The following gifts may be acceptable:

1. Cash;

2. Tangible Personal Property;

3. Securities;

4. Real Estate;

5. Retirement Plan Beneficiary Designations;

6. Bequests; and

7. Life Insurance Beneficiary Designations.

B. The following criteria govern the acceptance of each gift form:

1. Cash: Cash is acceptable in any form. Checks shall be made payable to the Library and shall be delivered to the Library’s administrative offices or through another format designated by the Library’s executive director.

2. Tangible Personal Property: All other gifts of tangible personal property shall be examined in light of the following criteria:

a) Does the property further the mission of the Library?

b) Is the property marketable?

c) Are there any undue restrictions on the use, display, or sale of the property?

d) Are there any carrying costs for the property?

e) Is the title of the property clear?

The final determination on the acceptance of other tangible personal property gifts shall be made by the Board or a designated committee.

3. Securities: The Library can accept publicly traded securities. Marketable securities may be transferred to an account maintained at one or more brokerage firms or delivered physically with the transferor’s signature or stock power attached. As a general rule, all marketable securities shall be sold upon receipt unless otherwise directed by the Board or a designated committee. In some cases marketable securities may be restricted by applicable securities laws; in such instance the final determination on the acceptance of the restricted securities shall be made by the Board or a designated committee.

4. Real Estate:

a) Gifts of real estate may include developed property, undeveloped property, or gifts subject to a prior life interest. Prior to acceptance of real estate, the Library shall require an initial environmental review of the property to ensure that the property has no environmental damage. In the event that the initial inspection reveals a potential problem, the Library shall retain a qualified inspection firm to conduct an environmental audit. The cost of the environmental audit shall generally be an expense of the donor.

b) When appropriate, a title policy or a title binder, as applicable, shall be obtained by the Library prior to the acceptance of the real property gift. The cost of this title policy or title binder and review of same, as applicable, shall generally be an expense of the donor.

c) Prior to acceptance of the real property, the gift shall be approved by the Board or a designated committee and by the Library’s legal counsel. Criteria for acceptance of the property shall include:

(1) Is the property useful for the purposes of the Library?

(2) Is the property marketable?

(3) What ownership interest does the donor have in the property?

(4) Are there any restrictions, reservations, easements, or other limitations associated with the property?

(5) Are there carrying costs, which may include insurance, property taxes, mortgages, or notes, etc. associated with the property?

(6) Does the environmental audit reflect that the property is not damaged?

5. Retirement Plan Beneficiary Designations: Donors and supporters of the Library will be encouraged to name the Library as beneficiary of their retirement plans. Such designations will not be recorded as gifts to the Library until such time as the gift is irrevocable. When the gift is irrevocable, but is not due until a future date, the present value of that gift may be recorded at the time the gift becomes irrevocable.

6. Bequests: Donors and supporters of the Library will be encouraged to make bequests to the Library under their wills and trusts. Such bequests will not be recorded as gifts to the Library until such time as the gift is irrevocable. When the gift is irrevocable, but is not due until a future date, the present value of that gift may be recorded at the time the gift becomes irrevocable.

7. Life Insurance Beneficiary Designations: Donors and supporters of the Library will be encouraged to name the Library as beneficiary or contingent beneficiary of their life insurance policies. Such designations shall not be recorded as gifts to the Library until such time as the gift is irrevocable. Where the gift is irrevocable, but is not due until a future date, the present value of that gift may be recorded at the time the gift becomes irrevocable.

IV. PLEDGES AND GIFT AGREEMENTS

1. All Pledges shall be Documented in Writing. A Pledge is a commitment to give a specific dollar amount according to a fixed time schedule. All pledges are required to be in writing.

2. Pledge Agreement. A Pledge Agreement is appropriate where the Library is taking on financial or other obligations in reliance on the anticipated gift (e.g. to start capital construction; to initiate a named program; to solicit additional donors, etc.). In such cases, the Board must approve any Pledge Agreement, which may be prepared on a form similar to the one attached to these policies.

3. Pledge Payments.

a) Pledges should be fulfilled through payments of cash or publicly traded securities.

b) If real estate or other non-marketable assets are used as payment, that must be approved by the Board in advance of payment.

c) If publicly traded securities are used as payment, the value of such securities shall be determined based upon the value at the mean of the high and low prices on the date of receipt.

d) Expected matching gift amounts (such as from employers) cannot be used to reduce pledge balances. Matching gifts cannot be obligated by the donor and cannot satisfy pledges.

4. Minimum Information. The following minimum information must exist to substantiate a pledge:

a) The amount of the pledge must be clearly specified;

b) There must be a clearly defined payment schedule;

c) The donor may not proscribe contingencies or conditions;

d) The donor must be considered to be financially capable of making the gift.

e) The pledge must be legally binding.

5. Donor Recognition. The Library places great value on recognizing and showing appreciation to donors for their generosity. Therefore, donors may be recognized in various ways, including without limitation events and media announcements, corresponding with the type, amount, and purpose of the gift. Any new or novel methods of donor recognition must be approved by the Board.

6. Gift Refunds. The Library does not refund contributions.

V. RESTRICTIONS ON GIFTS

The Library will accept unrestricted gifts, and gifts for specific programs and purposes, provided that such gifts are not inconsistent with its stated mission, purposes, and priorities. The Library will not accept gifts that are too restrictive in purpose. Gifts that are too restrictive are those that

1. Violate the terms of the Library’s Bylaws or the Act;

2. Are too difficult or expensive to administer;

3. Are for purposes outside the mission of the Library;

4. Would result in the Library losing its status as an Internal Revenue Code § 501(c)(3) organization; or

5. Would result in any unacceptable consequences for the Library. All final decisions on the restrictive nature of a gift, and its acceptance or refusal, shall be made by the Board or a designated committee.

Generally, gifts that are restricted to supporting the circulating collection or specific items or categories of items in the circulating collection are acceptable, including without limitation gifts in memory of or in honor of one or more individuals. Notwithstanding the foregoing, however, any restricted gifts in excess of $25,000 must be reviewed by the Board prior to acceptance.

VI. LEGAL COUNSEL

The Library shall seek the advice of legal counsel in matters relating to acceptance of gifts when appropriate. Review by counsel is recommended for:

1. Gifts of securities that are subject to restrictions or buy-sell agreements;

2. Documents naming the Library as trustee or requiring the Library to act in any fiduciary capacity;

3. Gifts involving contracts, such as bargain sales or other gifts requiring the Library to assume an obligation;

4. Transactions with potential conflicts of interest;

5. Gifts of property which may be subject to environmental or other regulatory restrictions;

6. Gifts of closely held securities; and

7. Other instances in which use of counsel is deemed appropriate by a designated committee of the Library.

VII. MISCELLANEOUS

1. Securing appraisals and legal fees for gifts to the Library. It will be the responsibility of the donor to secure an independent appraisal (where required) and independent legal counsel for all gifts made to the Library.

2. Valuation of gifts for development purposes. The Library will record a gift received by the Library at its fair market value as determined by independent valuation (where required) for gift purposes on the date of gift.

3. Acknowledgment. Acknowledgment of all gifts made to the Library and compliance with the current IRS requirements in acknowledgment of such gifts shall be the responsibility of the Board. IRS Publication 561 Determining the Value of Donated Property and IRS Publication 526 Charitable Contributions are applicable to this Policy as guidance.

4. Anonymous Gifts. Anonymous gifts may be accepted by the Library. The Library will respect the name of any donor who requests anonymity as confidential, provided that the Library reserves the right to disclose the donor’s name to the Board and to any governmental authority or agency, or a court of competent jurisdiction to which the donor’s name is required to be disclosed by applicable law, rule, regulation, act or order. The Library reserves the right to report the amount of any anonymous gift and any other terms or restrictions imposed by such gift. Further, the Library reserves the right to disclose or acknowledge the name of an anonymous donor if such information is or becomes public knowledge through no fault or omission of the Library.

VIII. AMENDMENT OF POLICY

This Policy and the guidelines in this Policy have been reviewed and accepted by the Board. The Board of the Library must approve any changes to or deviations from this Policy and the guidelines in this Policy.

Policy adopted by the Ann Arbor District Library Board December 12, 1995 Revisions adopted September 16, 1996, June 19, 2006, November 13, 2017 and June 28, 2021

LITIGATION POLICY

To fulfill its duties and obligations, the Ann Arbor District Library Board needs adequate and timely information on litigation to which it is a party. The Board shall give direction through the Director to its counsel on all significant litigation matters.

The Director shall provide the Board a monthly inventory of significant litigation. This inventory shall contain a brief summary of the status of each case, the name of counsel responsible for it, the extent of insurance coverage, and any other matter that the Director deems appropriate.
Except where the need for promptness makes consultation unfeasible, the Director shall consult with the Board before undertaking the initiation of or the response to legal action in sensitive cases. Sensitive cases are those that appear likely to have the possibility for changing the law affecting the library district, for drawing library policies into question, or for having significant political impact in the eyes of the Ann Arbor electorate.
This policy shall not preclude the signing of conventional insurance policies that typically grant insurance carriers substantial control over litigation arising under such policies. To the extent feasible, the Director and Board counsel shall consult with the lawyers for such carriers, and the Director shall report to the Board on such consultation.

Policy adopted by the Ann Arbor District Library Board December 12, 1995 Revisions adopted June 19, 2006

PURCHASING POLICY

To preserve the integrity of the purchasing process and maximize our spending power, good safeguards and controls must exist but must not be so restrictive as to stifle the professional judgment and personal initiative necessary for the purchasing official to function effectively in the public interest. Therefore, it is the policy of the Ann Arbor District Library to:

1. Conduct all purchasing activities according to the laws and regulations of the state and accepted professional principles and practices.

2. Conduct all purchasing activities in such a manner as to develop and maintain good public, vendor, and library relationships.

3. Establish a practical degree of standardization of supplies and equipment with due allowance for the varying requirements of the district.

4. Encourage by every legitimate means active and vigorous competition for library district business.

5. Obtain the most favorable prices possible through large scale buying and purchasing, whenever feasible, directly from the manufacturer or producer.

6. Extend honest, courteous and impartial treatment; assure fair and equal opportunity to all interested, qualified vendors.

7. Prohibit any employee of the library district from having financial interest or any other personal beneficial interest, either directly or indirectly, in the purchase of any commodities or contractual services for the library district.

8. Accept or reject any or all bids (or any part thereof) in the interest of the library district.

9. Determine uniform guidelines for solicitation of bids and quotations for goods and/or services as follows:

a. If the cost of required materials, equipment, goods, supplies, or services to be obtained does not exceed thirty three thousand dollars ($33,000) (to be increased each year by the C.P.I. using 2017 as the base year), the Business Services Office Purchasing Agent may make the acquisition on the open market in a manner consistent with sound purchasing procedure. In such cases, informal quotes should be used to determine competitiveness, quality, and availability. Bids within the price limitations need not be recommended to the District Library Board but must be approved by the Finance Manager. Purchase of materials, equipment, goods, supplies or services shall not be made without the execution of the proper requisition form, with the exception of petty cash funds.

b. If the cost of required materials, equipment, goods, supplies, or services can reasonably be expected to exceed a base of $33,000 (to be increased each year by the C.P.I. using 2017 as the base year), specifications shall be prepared describing the kind, quantity, and quality of all materials, equipment, goods, supplies, or services which may be needed for any designated period. Notice of time and place of receiving bids shall be given by publication by two insertions in the local media appearing at intervals of ten (10) and five (5) days prior to the time for receiving bids

c. If AADL needs to hire outside services from professionals, including but not limited to lawyers, accountants, auditors, consultants, architects, construction managers, AADL may either use the procedures set forth in paragraph 9(b) above or a qualifications selection process. The qualifications selection process purpose is to determine the best service provider for expertise-based function(s). If the selection process is used, it shall be approved by the relevant committee of the Board, and discussed with the Board prior to soliciting proposals. Distribution of the finalists’ qualifications shall be distributed to the entire Board for review prior to any vote to award a contract for professional services. Service providers’ work shall be reviewed at least every two years in order to determine whether services have met expectations both in expertise and cost. Any service provider, no matter under which procedure selected, shall be subject to the non-discrimination requirements set forth in paragraph 10.

d. The District Library Board will review the recommendations for purchases, and awards of contract shall be approved by the District Library Board and so indicated in the official minutes of the District Library Board.

e. All instances whereby real estate is purchased, rented or sold shall be submitted to the District Library Board for approval and shall be recorded in the official minutes of the District Library Board.

10. Require vendors, contractors, and subcontractors not to discriminate against any employee or applicant for employment to be employed in the performance of contracts with respect to hire, tenure, or terms, conditions or privileges of employment because of race, color, religion, national origin or ancestry, age, sex, sexual orientation, height, weight, marital status, veteran status, physical or mental disability, or other factors prohibited by applicable law. Breach of this covenant may be regarded as a material breach of the contract or purchasing agreement as provided in the Michigan Fair Employment Practices Act and may be processed thereunder.

11. Emergency is defined as an unforeseen combination of circumstances or the resulting state that calls for immediate action. This action, the purchase of goods and/or services, contravening the policy statements above must be approved by the Library Director and/or his/her designee. Detailed rationale must be submitted with the request to purchase. Notification of the District Library Board is to be made regarding all such emergencies in accordance with the above-mentioned guidelines.

12. Major library vendors that are supplying computer hardware and software, books, audio-visual materials, and periodical subscriptions vendors to the Ann Arbor District Library will be exempt from the above bid process.

Policy adopted by the Ann Arbor District Library Board December 12, 1995 Revisions adopted September 16, 1996, August 13, 2001, June 19, 2006 and Novemer 13, 2017

IDENTIFICATION AND DISPOSITION OF OBSOLETE, SURPLUS OR SALVAGE PROPERTY

Policy:

Efficient administration of the Ann Arbor District Library ("Library") requires the identification, recording and disposition of personal property no longer necessary or appropriate for Library programs and operations. Accordingly, the Library shall maintain an effective program for identification, recording, and disposition of obsolete, surplus or salvage property owned by the Library. This policy applies to personal property of the Library, which is defined as all items of moveable or fixed equipment and supplies owned by the Library. The identification, recording, and disposition of all obsolete, surplus or salvage property shall be consistent with this Policy. The unauthorized removal, disposal, or expropriation of Library owned, loaned, or donated property, regardless of value, constitutes a serious breach of Library policy and may constitute grounds for termination of employment. The procedures outlined below shall govern the process for:

Determining whether Library property is obsolete, surplus or salvage property
Recording of Library property that is obsolete, surplus or salvage property
Disposition of Library property in a manner that is in the best interests of the Library and consistent with its status as a public body and tax-exempt organization
Assuring that all funds collected from the sale of obsolete, surplus or salvage property are deposited in a Library account consistent with applicable financial and accounting policies

Procedure:

1. The Facilities Manager of the Library shall direct the periodic review of all Library property, implement a process for recording of obsolete, surplus or salvage property, and undertake disposition by sale, donation, trade, or discard of any property not required or appropriate for Library purposes.

2. Process for Identification of Obsolete, Surplus or Salvage Property. Each Department Manager shall be responsible for identifying Library property within his or her Department that is obsolete, surplus or salvage property. For all items, the Department Manager will complete an Idle Equipment Disposition Form and email the completed form to the Facilities Manager or his or her designee.

3. Surplus Property List and Internal Re-circulation. The Facilities Manager will review all Idle Equipment Disposition Forms and identify property that may have some use in other Library departments. All such items shall be recorded on a Surplus Property List and posted on the Facilities Department's internet web page dedicated to Surplus Property. To encourage the internal re-circulation of surplus property within and among Library departments, items on the Surplus Property List will be available only for internal transfer (via requisition) among Library departments for an initial listing period of thirty (30) days. After the thirty (30) day period has elapsed, surplus items that are not appropriate for disposition will be stored for future use. All other items will be subject to disposition as provided in this procedure.

4. Criteria for Disposition. Property identified by the Facilities Manager as obsolete, surplus, or salvage will be inspected to determine the condition and usability of such items for Library programs and operations. The following criteria may assist in identifying whether property is no longer serviceable or usable: repair parts for the equipment are no longer readily available; repair records indicate that the equipment/item has no usable life remaining; the equipment/item no longer contributes to Library operations or programs; or the equipment/item poses a safety or environmental hazard.

5. Disposition of Obsolete, Surplus or Salvage Property.

a. Condition of Property. Property for disposition (other than for sale as scrap or discard as provided in subparagraphs B.(iv) and (v)) should be in reasonable condition given the age and type of property. Cabinets, desks and other equipment with drawers should be free of supplies and materials. Equipment for disposition should include all component parts and mechanical items should include applicable operation manuals or brochures, if possible.

b. Disposition Options. After property is determined to be appropriate for disposition, the Facilities Manager shall determine the best method for disposition. Depending on the nature and condition of the property, it may be disposed through trade-in, sold to the public as usable property, donated, sold as scrap or discarded.

i. Trade-in: If equipment/items are obsolete, appropriate for replacement, and cannot be used in their current condition by another Department, the Facilities Manager should explore the possibility of a trade-in. If the equipment vendor will accept trade-in of old equipment, the bid solicitation should require bid prices both with and without trade-in and indicate that an award may be made on either basis. The best trade-in offer can then be evaluated against the expected sale price for the obsolete item.

ii. If neither re-circulation of property within the Library nor trade-in is feasible, the Facilities Manager may arrange to sell obsolete or surplus items to the general public by posting the items on the Library’s website. The established sale price should be consistent with fair market value as reasonably determined by the Facilities Manager based on the original cost and net book value of the equipment/property, the type, age and condition of the equipment/property, and any other relevant information. The Finance Manager reserves the right to reject any bid that is not in the interest of the Library. For all sales the Library, shall include the following disclaimers:

THE SALE OF THIS PROPERTY OF THE ANN ARBOR DISTRICT LIBRARY TO YOU IS EXPRESSLY CONDITIONED UPON AND SUBJECT TO THE FOLLOWING. THIS PROPERTY IS SOLD "AS IS" AND WITHOUT ANY EXPRESS WARRANTIES OR ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. PURCHASER BEARS ALL RESPONSIBILITY FOR INSPECTION OF THE PROPERTY PRIOR TO PURCHASE AND PAYMENT OF THE PURCHASE PRICE SHALL BE DEEMED TO BE ACCEPTANCE OF THE PROPERTY. ALL SALES ARE FINAL. UPON SALE OF THE PURCHASED PROPERTY TO PURCHASER, THE ANN ARBOR DISTRICT LIBRARY SHALL HAVE NO LIABILITY WHATSOEVER AS TO THE USE OR FITNESS OF THE PURCHASED ITEMS.

All purchasers must pay the established purchase price prior to receipt of the property. Acceptable payment terms include: cash, money order, credit card or certified or cashier’s check. No personal checks may be accepted. The purchaser shall be responsible for packing and transporting all purchased property.

iii. Donation: If obsolete, surplus or salvage property is not sold as provided in this Policy within 2 months after posting on the Library website, the Facilities Manager, with the concurrence of the Finance Manager, may elect to donate obsolete, surplus or salvage property to one or more governmental or private nonprofit organizations recognized as exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. Donation of property must be consistent with the best interests of the Library and are subject to the conflict of interest provisions of this Policy.

iv. Sale as Scrap: Items of personal property that are subject to disposition but that are unsuitable for their original use and purpose may be sold as scrap or recycled when determined by the Facilities Manager to be appropriate and fiscally responsible. Library property sold as scrap shall be sold to the highest bidder.

v. Discard of Property Unsuitable for Use or Salvage: Items of personal property that are subject to disposition but that are unsuitable for use or salvage or that may be pose a safety or environmental hazard shall be discarded and disposed of by the Library in a safe and responsible manner.

c. Security. Property for disposition should not be left on loading docks and ramps, in hallways or building exits in an unsecured manner. Property awaiting disposition should remain in a secure area until such time it is collected by the purchaser, who assumes responsibility for the property upon payment.

6. Conflict of Interest. To address conflicts of interests and the appearance of impropriety in connection with the disposition of Library property, Library employees may not submit bids or purchase obsolete, surplus or salvage property if they participated in the process of identifying such property for disposition or the decision to dispose of it. Additionally, no donation (i.e., transfer of ownership without compensation) of Library property to Library employees or members of their immediate families will be permitted.

7. Records. The Facilities Manager shall maintain appropriate records of property identified as obsolete, surplus or salvage property, the method of disposition, and funds received from the sale or other disposition of the property. The Finance Manager or his designee will be responsible for handling any funds received from the disposition of Library property. Records of sales, donation, or other disposition of Library property pursuant to this Policy shall be retained by the Facilities Manager for a period of not less than seven (7) years.

Policy adopted by the Ann Arbor District Library Board December 12, 1995 Revisions adopted June 19, 2006 and November 13, 2017

STANDARDIZATION OF EQUIPMENT PURCHASES

Standardization of equipment purchased for library, office, or other use is to be achieved whenever practicable. District wide effort and support to fill consolidated requirements in standard off-the-shelf office equipment, copiers, audio-visual equipment, computer hardware, and other equipment should result in lower purchasing and repair costs and thereby optimize purchasing power. The Director or his/her designee is responsible for establishing and implementing rules and regulations governing the application of this policy.

Policy adopted by the Ann Arbor District Library Board December 12, 1995 Revisions adopted June 19, 2006

INSURANCE OF PROPERTY

The District Library Board shall insure district property unless otherwise directed by the district electors. Such insurance may be obtained from mutual, stock, or other responsible companies licensed to do business in the State of Michigan. The status of the insurance program in its entirety shall be reviewed annually by the Treasurer with specific reference to adequacy of coverage, placement of insurance, and services provided by insurance agents, their representatives, associations, or companies.

Policy adopted by the Ann Arbor District Library Board December 12, 1995

POLICY FOR FUNDRAISING EVENTS

I. Library Sponsored

Fundraising events will be evaluated and implemented only when it is determined that they meet the following criteria:

A. There is a clearly articulated program or project that would be enhanced by a fund raising event, e.g., a pre-opening for a new branch.

B. The event allows the identification and cultivation of individual donors: a walk-a-thon, for example, would not meet this criteria.

C. Budget projections for the event indicate that it will net not less than 50 percent of the gross revenue.

D. There is sufficient volunteer involvement/commitment.

E. It does not conflict with existing programs/events.

II. Outside Groups

Fundraising events put on by outside groups for the benefit of the Library will be evaluated using the same criteria.

A. Proceeds may be designated by the group to any approved priority of the Library.

B. All publicity must be approved by the Public Relations staff when the Library's name is used in connection with an event.

Policy adopted by the Ann Arbor District Library Board June 15, 1998 Revisions adopted June 19, 2006

POLICY FOR REFRESHMENTS AT LIBRARY EVENTS

Wine and beer may be served at by-invitation-only, no fee, adults-only, Library sponsored events with the approval of the Library Director or Board President.

Policy adopted by the Ann Arbor District Library Board October 16, 2000

LIBRARY CREDIT CARD POLICY

The Finance Manager is responsible for credit card issuance, accounting, monitoring, and retrieval and responsible for overseeing compliance with this credit card policy. Library credit cards may only be used by an authorized officer or employee of the Library for the purchase of goods and services for official business of the Library, in accordance with normal Library finance procedures.

Credit card purchases are subject to the current Library purchasing, receiving and payment procedures and internal controls. Such procedures and internal controls shall include (1) documentation as to the goods or services purchased, the cost of the goods or services, the date of purchase, and official business (such as the Library Department) for which the goods or services are purchased; and (2) procedures for approval of the credit card invoices before payment. The balance, including any interest due, shall be paid for within not more than 60 days of the initial statement date. Every effort will be made to pay the current balance to avoid finance charges.

Pursuant to MCL §129.242 et seq., the total combined authorized credit limit of all credit cards issued by the Library shall not exceed 5% of the total budget of the Library for the current fiscal year.

Unauthorized use of the Library credit card will be handled on a case-by-case basis. Disciplinary measures may include termination of employment or services and prosecution up to the maximum allowed under current law.

Any Library employee or officer who is issued the credit card is responsible for its protection and custody and shall immediately notify the Finance Manager and/or the Director if the credit card is lost or stolen.

Any Library employee or officer who is issued the credit card shall return the credit card upon termination of his or her employment or service.

Policy adopted by the Ann Arbor District Library Board March 19, 2002 Revisions adopted July 20, 2009 and November 13, 2017

LIBRARY POLICY FOR ACCEPTANCE OF PAYMENTS VIA FINANCIAL TRANSACTION DEVICES

The Library is authorized by the Board of Trustees and adopts this policy pursuant to MCL §129.221 et seq. to accept payment of any and all fees and other funds due to the Library via an electronic funds transfer card, a credit card, or a debit card (collectively, “approved financial transaction devices”). The Treasurer of the Library is responsible for determining any additional types of financial transaction devices that may be accepted by the Library. The types of fees that may be paid to the Library via an approved financial transaction device include without limitation donations from and fees due to the Library from Library patrons.

The Finance Manager is responsible for accounting, monitoring, and overseeing compliance with this policy. Payments to the Library via approved financial transaction devices shall be subject to the current Library payment procedures and internal controls.

Policy adopted by the Ann Arbor District Library Board July 20, 2009 Revisions adopted November 13, 2017

LIBRARY POLICY FOR PAYMENT OF LIBRARY FUNDS VIA ELECTRONIC TRANSACTIONS

The Library Board of Trustees adopts this policy pursuant to MCL §124.301 et seq. The Finance Manager is designated by the Board of Trustees as the Electronic Transactions Officer (“ETO”) for the Library. As the ETO, the Finance Manager is authorized to enter into automated clearing house (“ACH”) arrangements and ACH transactions. For purpose of this policy, a “ACH arrangement” means an agreement between the originator of the ACH transaction and the receiver of the ACH transaction. An “ACH transaction” means an electronic payment, debit, or credit transfer processed through an ACH. ACH transactions of the Library include without limitation automated direct deposits of payroll funds to Library employees who elect this method of payment.

The ETO is responsible for all ACH arrangements and ACH transactions of the Library, including payment approval, accounting, reporting, and generally for overseeing compliance with this policy. An ACH arrangement or ACH transaction may only be used by the ETO as payment for goods and services for official business of the Library, in accordance with normal Library finance procedures.

ACH arrangements and ACH transactions are subject to the current Library purchasing, receiving and payment procedures and internal controls to monitor the use of ACH transactions made by the Library. Such procedures and internal controls shall include documentation as to the goods or services purchased, the cost of the goods or services, the date of payment, and the department levels serviced by payment. Invoices subject to payment pursuant to an ACH arrangement or via ACH transaction shall be approved by the ETO prior to payment, or by his or her designee as authorized by other Library policies or procedures. ACH documentation required by this policy shall be contained in the electronic general ledger software system of the Library.

Unauthorized approval of ACH arrangements or ACH transactions will be handled on a case-by-case basis. Disciplinary measures may include termination of employment or services and prosecution up to the maximum allowed under current law.

Policy adopted by the Ann Arbor District Library Board July 20, 2009 Revisions adopted November 13, 2017

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