Your Library and Its Finances

Library Depreciation Funds

Information about library depreciation reserve funds can be found on the MSL Consulting webpages, including a handbook on this topic.

The Library Depreciation Reserve Fund (LDRF) is a type of reserve fund specifically for libraries, as defined in Montana Code Annotated (MCA): Library Depreciation Reserve Fund Authorized

22-1-305. Library depreciation reserve fund authorized.

The governing body of any city or county or a combination of city and county in Montana may establish a library depreciation reserve fund for the replacement and acquisition of property, capital improvements, and equipment necessary to maintain and improve city, county, or city-county library services.

22-1-306. Moneys for library depreciation reserve fund.

Moneys for the library depreciation reserve fund are those funds which have been allocated to the library in any year but which have not been expended by the end of the year. Such moneys include but are not limited to city or county or city-county appropriations, federal revenue sharing funds, and public and private grants.

22-1-307. Investment of fund.

The moneys held in the library depreciation reserve fund may be invested as provided by law. All interest earned on the fund must be credited to the  library depreciation reserve fund.

As the law states, a depreciation reserve fund is a separate dedicated fund which a library may use for one-time purchases and improvements for the library. This is similar to a capital improvement fund but has fewer restrictions on how the funding may be spent. This allows the library to set aside funds for future needs and long-term projects. It also gives the library board the full authority over the use of the funds.

For example, libraries around Montana with Library Depreciation Reserve Funds have used those monies to pay for computers and networking equipment, HVAC systems, security equipment, new windows, furniture upgrades, roofing, exterior improvements, and more.