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Billings library faces $729,911 shortfall in FY27; director urges long‑term funding plan
Summary
The Billings Public Library told the council its FY27 expenses are $5.6 million against $4.89 million in projected revenue, creating a $729,911 gap that the library said it will cover with reserves this year but warned is structurally unsustainable without additional funding or changes.
The Billings Public Library told the City Council Monday that it projects a $729,911 operating gap for fiscal year 2027 and will again draw on reserves to balance operations unless the city, county or other revenue sources change.
Library presenter Kelsey walked the council through services that stretch across Yellowstone County — two bookmobiles, four express pickup lockers, a downtown branch open 63 hours a week, and an expanding makerspace — and highlighted rising usage: more than 744,000 checkouts and nearly 300,000 visitors to the main branch in the past year. Despite that demand, the library’s FY27 financial summary lists $5,600,000 in expenses against $4,890,000 of projected revenue, leaving a $729,911 shortfall that the library expects to cover, for now, from its fund balance.
Kelsey said the library’s beginning fund balance is healthy but cautioned that drawing down reserves repeatedly is not sustainable. ‘‘We will need to utilize $729,911 out of our reserves, to bridge the gap this year,’’ the presenter said, and added that the library has used reserves before (about $330,000 last year) to smooth temporary shortfalls.
Options discussed: Kelsey and council members outlined several approaches to address the structural problem — restoring entitlement‑share funding, increasing the city’s transfer to the library (the interlocal agreement requires the city contribute no less than 4.5 mills in addition to a dedicated library mill), pursuing a dedicated mill levy, expanding fundraising through the library foundation and friends groups, or introducing modest user fees for some services. Kelsey noted that recent capital additions (express lockers, the collab makerspace) were funded primarily by the library foundation and grants, not the general fund.
Council members pressed the director for concrete options and timetables: several asked the library to return within six months with recommendations on revenue generation, potential fee changes, or targeted cuts. Council member Bill Kennedy said he would ‘‘have trouble in the future without coming back with some other suggestions’’ and asked the library to present specific proposals for revenue or cost reductions.
Next steps: The library will provide a detailed history of prior funding sources and partnerships and work with council on possible long‑term remedies. The presentation concluded without a council vote; the budget process will continue through the scheduled work sessions before adoption.
