September 21, 2009 | Sheryl Rzetelny
August 20, 2009 7:30 p.m.
The Chairperson, Colleen Van Auken, called the meeting to order at 7:32PM
Present: J. Fausone, K. Schulz, M. Siegrist, G. Snow, C. Van Auken
Absent: D. Turner
Also Present: E. Davis, S. Rzetelny, L. Golden
Swearing in of new trustee Kim Schulz by Canton Township Clerk, Terry Bennett
Call To Audience
Approval of Agenda
The agenda was approved with additions
Approval of Minutes
- Minutes of the July 16th Special Meeting were approved as written
- Minutes of the July 16th Regular Meeting were approved as written
- Two postcards from G. Snow advising attendance at 8/20 meeting
- Invitation to Canton Community Foundation’s “Community Philanthropy Summit” October 1st, 1:30-5 pm at Summit on the Park
- Email from employee and resident J. Gillikin supporting roll-back of the 2010 millage to 1.5437
- Trustee Van Auken reporting a conversation overheard at Target between two other customers complimenting the library
Report of the Library Director
- Eva reports that Baldwin Library Director, Marti Custer has resigned from her position, effective November, 2009.
- Trustees were provided with an updated contact list, please advise Sheryl of any needed revisions.
- Trustee Fausone requested confirmation that the History Channel grant we did not receive was for previously discussed digitizing work. Eva replied that the grant would have been for $10,000 and that it was for digitizing.
2010 Revenue Projection, discussion of 2010 expenditures – The Board was provided two budget comparisons, as requested, reflecting the 9% reduction in expenditure at a millage rate of 1.498 and a 7% reduction at a millage rate of 1.5437 both due to the expected reduction in 2010 revenue with budget estimates for 2011 and 2012.
Reviewing the 2010-2012 Budget Narrative, Eva explained revenue estimates are based on: information gathered so far from the township and county; expected cuts in state aid, and three-five year averages and/or actual 2009 revenue. Property taxes were estimated at a 92% collection rate in 2010. Revenues in 2011 show an addition 4% decline over 2010 at both millage rates and in 2012 an additional 2% decline at both rates.
State Aid to Public Libraries reflects a 50% reduction due to the dissolution of the Department of History, Arts and Libraries and the breakup of the Library of Michigan, who are currently responsible for state aid distribution. It is unclear where the assets will transfer and how they will be administered. A current Republican proposal proposes moving the function to the Secretary of State’s office but there is not much unilateral support. The Michigan Library Association is attempting a grassroots effort encouraging libraries to contact their legislators to persuade them to keep the Library of Michigan whole.
Fees, which include copy center fees, replacements, and community room rental, reflect an increase of 32% based on averages and increased usage. Expected fine revenue was reduced by 14%. Penal fines received in 2009 were down by 1/3 and overdue fines show a slight increase.
Miscellaneous and Contributions reflects an 85% reduction based on actuals.
Interest estimates have been reduced by 78% due to the current economic climate.
Café rent revenue has been held at zero due to the Board decision to waive the rent. The lease comes up for renewal in May and should be reviewed. Eva has not received a profit and loss statement from the café in some time but they report steady traffic although low volume.
Expenditures in the proposed 2010-2012 Budget show reductions in all lines except Maintenance and Repairs, Rentals, Building Improvements and Debt Service.
Salaries have been reduced by 9% in both millage rate estimates. Overtime currently paid for Sunday will be eliminated and Sunday will be paid at the regular rate and will also be included as part of the regular work week and not an extra day as it is now. Eight unpaid furlough days have been shown on the proposed calendar, most adjacent to holidays to achieve additional utility savings along with the salary savings. Holiday pay has been restructured for part-time staff and staffing has been reduced at public service desks. A hiring freeze has also been instituted.
Fringe benefits have been cut 6% or $30,659, compared to 2009 mostly due to salary reductions, a new line for “unemployment reimbursement” has been added. The Retiree Health Benefit contribution for 2010 is derived from the last actuarial study; a new study will be completed in 2010.
Supply costs have been cut 3% but do include a new Automatic External Defibrillator (AED), which is overdue for replacement. Vendor cataloging and pre-processing has been added and will help save staff time and add the ability to redeploy staff to public service desks where needed. Library cards and copy cards will also need to be purchase every other year.
Library Materials have been cut 4% and represent 14% of the 2010 budget and include cuts to all materials purchases, electronic as well as print. Nine data bases will be cancelled when their subscriptions expire based on low usage. The industry standard is for library materials to make up 10-15% of total budget and Library Materials budget has been reduced to 11% of the library’s total budget for 2011 and 2012. Currently, the cost for 25 of our databases is borne by the state. If the MEL databases do not maintain full state funding we will be unable to pay for individual subscriptions which are estimated to be at least $36,000, not including OCLC.
Professional and Contractual Services expenditures have been budgeted 24% less than 2009. Costs for the mandatory triennial Retiree Health Actuarial study are reflected in 2010, but will not be necessary for 2011 or 2012. Delivery costs for MeLCat interlibrary loan and TLN are new expenditures. Beyond delivery, there is no information on what costs would be to participate in the MeLCat catalog should state funding be eliminated and is not reflected in any budget year.
Memberships and Dues will continue to be paid by the library for individual trustees and staff in 2010 but has been eliminated in 2011 and 2012 due to further revenue declines.
Travel has been cut 52% compared to 2009 and all out-of-state travel is eliminated. Conference expenses in 2011 and 2012 are zero.
Community promotion expenses have been cut 31% compared to 2009.
The Printing budget has been cut 47% and Laurie Golden continues to work on ideas to reduce the cost of Connections such as taking out ads in the Observer listing programs and/or a bi-monthly postcard of programs. Trustee Siegrist reiterated the discussion held on converting Connections to an electronic subscription with the opportunity to opt-in for direct mail. Eva commented that this could save approximately $10,000 per issue for printing, however, the bulk mail advantage would be lost by first class mailing to individual addresses. Design costs would still be incurred for either the electronic or print format. Trustee Schulz asked Eva to contact Canton Leisure Services for advice on their newsletter transition to electronic format.
Insurance and Utilities are based on prior year averages. The library has reduced watering frequency of the sprinkler system to reduce usage.
Maintenance and Repairs is one of four budget lines showing an increase in 2010 due to the addition of security cameras at the suggestion of the Canton Township Police after the flasher and video game theft incidents.
Rentals 2010-2012 costs reflect contractual increases.
Building Improvements is the third of four budget lines with an increase in 2010 due to the necessary replacement of lights in several areas of the library and the necessary addition of a ceiling fan in the outside book drop to help regulate temperature for the new RFID check-in and sorting system.
Capital Outlay shows a decline of 67% compared to 2009 due to the deferment of computer and equipment replacement and extending the replacement rotation to five years from three.
Necessary expenditures include resealing leaking skylights and repairs to crumbling concrete in the parking lots and a time clock necessary for us to automate payroll processing.
Debt Service and its associated administration fees are set for the duration of the bond terms through 2020.
Property Tax Refunds are the fourth line item increasing in 2010 in response to Michigan Tax Tribunal and Board of Review rulings that require us to refund taxes to property owners who have successfully appealed their assessments. We have budgeted half of what is pending on assurances from the Township that that is a reasonable assumption.
Summary at 1.498 mills – At 1.498 mills, and as a result of the budget line cuts, 2010 shows a contingency of +$47,921 with no further salary or fringe adjustments. These funds would be used to cover any unbudgeted costs that may come up or to fund a partial implementation of the salary study or convert the marketing and communications manager to full-time status.
In 2011and 2012 even with the additional further deep cuts outlined in the Budget Narrative at the current millage rate of 1.498, the library is facing a deficit of $104,064 in 2011 and a deficit of $238,275 in 2012.
Summary at 1.5437 mills – At 1.5437 mills, and as a result of the budget cuts, 2010 shows a Contingency of +$206,660 with no further salary or fringe adjustments. These funds would be used to cover any unbudgeted costs that may come up or to fund a partial implementation of the salary study or convert the marketing and communications manager to full-time status.
In 2011 with the additional deep cuts outlined in the Budget Narrative, at a millage rate of 1.5437, the library is expected to show a surplus of +$48,325. In 2012, with the savings as reflected above and even at a millage rate of 1.5437, the library is facing a deficit of $41,664. Further possible cuts were outlined in the Budget Narrative, including not paying mileage reimbursements for staff, eliminating of the Staff In-Service and Volunteer Recognition Luncheons, continue with unpaid furlough days, consider permanent closures on slower days of the week, lower-cost, lower-benefit healthcare plans and the investigation of closing the defined benefit pension plan and conversion to defined contribution.
A separate budget plan with salary survey implementation variables at both the 1.498 and 1.5437 millage was presented as requested by the Board and reviewed.
Trustee Fausone acknowledged the administrative staff’s time and effort in preparing different budget alternatives and commented that we are probably one of the few libraries to prepare a three-year budget projection which serves to highlight our budget problems. He reported based on work with Oakland County municipalities, our auditor Plante & Moran believes our issues will worsen over the next few years. Data collected in Wayne County is older than that from Oakland which has current 9 month data. Plante & Moran’s assumption is for commercial property development to remain flat and budget issues may be worse than we anticipate. Trustee Fausone acknowledged it is difficult for trustees to deal with decreasing budgets and they need to approach any decisions with a lot of analysis. It is not prudent to increase any employee to full time or implement any portion of the salary survey by increasing the millage to the struggling taxpayers. He recommends maintaining the millage at 1.498, not adding the full-time position.
Trustee Schulz mentioned reading the responses to Eva’s blog and noted that some patrons were not adverse to a $6 increase but admitted that those same patrons are most likely avid library users and many non-users would not respond to the blog posts. She also inquired about the Strategic Plan focus groups and wondered if they were asked about a millage increase. Eva reported that Susan Kennedy asked the groups about the economy in general and most participants responded that they are using the library more, especially for entertainment purposes. Trustee Schulz asked for confirmation of the actual dollar amount the increased millage would project and was informed it was $6 per $100,000 in value, not $6 per household. Trustee VanAuken commented that no matter how minimal the increase, it’s still an increase.
Trustee Siegrist also reviewed responses to Eva’s blog and feels that not knowing what property values will do he would support resetting the millage to 1.5437, the maximum allowed under Headlee, since voters approved it. Trustee Snow also supported resetting the millage and commented that it was irresponsible to cut it. Trustee Fausone stated that it was appropriate to reduce the millage rate in light of the $2.5 million dollar fund balance in 2008. He also stated that the proposed budget with its increase in millage to1.5437 has a contingency of $206,660 and that the board agreed to transfer $460,000 from fund balance to operating to pay for the new RFID system, reducing the fund balance to $2.1 million. He approximates about $150,000 remaining to roll into fund balance at 2009 year end. He commented that the library could spend every dollar raised but needs to make difficult fiscal decisions. He could support reinstituting the materials budget and eliminating the furlough days but would not support making the Marketing and Communications Manager full-time. Trustee VanAuken stated resetting the millage gives the library breathing room but that is still not a valid reason for the increase.
Trustee Schulz asked for clarification of past precedent on use of the Fund Balance and was told that there are no written guidelines but the most recent use was a transfer of approximately $682,000 to fully fund the pension in 2007 due to a change in the GASB regulations. Plante & Moran has recommended the library maintain 20-30% of its operating budget in fund balance. Trustee Schulz commented that schools have been accessing fund balances and the public may be familiar with the procedure.
Trustee Siegrist asked Eva to explain what initially prompted the salary survey. She replied that some staff members asked her to explain the existing pay ranges and she found it difficult. As the library has grown and the salary ranges revised, no sense of hierarchy remained in the existing salary range document. Salaries should be defined, explainable and objective and the organizational structure needed revision.
Trustee Fausone asked Eva if she was willing to take the funds from elsewhere in the proposed operating budget to fund the full time marketing position and mid-range implementation of the new salary structure. Eva asked if the offer, as suggested at the July board meeting, to roll any remaining 2009 operating balance into 2010 to fund the position was “off the table” and Trustee Fausone responded, yes. Eva stated she would have to review the 2009 proposed budget but asked the board to commit to $23,000 to bring staff up to at least the minimum on the new pay scale.
Trustee Schulz stated her concern that the staff could construe furlough days as a punishment and is concerned about attitudes toward service. If the salary structure were implemented, on one hand we would be giving the employees a salary increase, but on the other taking it away with furlough days, to which Chair VanAuken stated furlough days are only temporary and would be eliminated when possible. Trustee Schulz also stated that the taxpayers would be asked to fund a salary increase but with the furlough day closures would have decreased opportunity to use the library. Dialogue continued about the twenty (20) State of Michigan furlough days and Trustee Snow inquired whether any staff would be willing to take any voluntary furlough. Discussion was held among the board to review support of resetting the millage with no conclusion. Trustee Siegrist reminded the trustees that CPL is a national award winning library and press coverage has definitely been increased due to Laurie Golden’s effort stating his support for resetting the millage and willingness to take the heat for doing so and while he would not support full implementation of the new salary structure he is uncomfortable with staff not being paid at the minimum level.
Eva asked for guidance from the Board on how to prepare a revised proposed budget(s). The Budget Hearing is required at the September Board Meeting and the library must file the L-4029 Millage Request with the county by September 30th. She suggested the Board call a special study session to review the budget proposals and narrow them down to one which could be presented at the September Budget Hearing. Eva will submit alternate dates and trustees should reply with their availability. Budgets will be prepared showing two options at 1.498 (Minimum New Salary Structure and Minimum New Salary + Full time Marketing) with no contingency and three options at 1.5437 (Minimum New Salary Structure, and Minimum New Salary + Full time Marketing, and Mid Range New Salary Structure) – all with no furlough days. It was also noted that while the organizational structure changes were discussed at the July meeting, the new salary structure was not yet approved.
Eva will request that the Department Heads reduce their 2010 Materials Budget to 11% of operating expense, but states that operating without some contingency has been difficult in 2009 and with the age of the building, unbudgeted maintenance issues will inevitably arise. She asked for the Board’s support if the need for a fund balance transfer for emergency equipment failures or building issues arise. In order to properly record the fund balance transfer for the RFID system an exact fund balance transfer amount will be requested in 2010 after all expenses have been incurred.
TLN Internet Services - Discussion was held about switching internet service providers from Metro Net to The Library Network (TLN) thereby saving approximately 40% ($1000/month) and increasing bandwidth to 50 Mbps (megabits per second) from 10 Mbps. Using TLN as our provider would also allow for ability to implement Internet2 activities. A change of IP address would be required along with a 3-year contract. The budget will not reflect these savings until discounts are refunded later in 2010.
K. Schulz moved and M. Siegrist supported Board authorization for the Director to exit the Metro Net Internet services contract when it expires in October 2009, and further authorizes the Director to enter into a three-year internet services contract with the Library Network, ending June 30, 2012.
The motion passed unanimously 09/08-20-1
Resolution Opposing the Dissolution of the Library of Michigan – Eva presented a sample resolution of support the Michigan Library Association is asking is members to enact.
M. Siegrist moved and G. Snow supported a motion to adopt the Resolution Opposing the Dissolution of the Library of Michigan.
Aye: G. Snow, M. Siegrist, C. VanAuken, K. Schulz
Nay: J. Fausone
The motion passed 09/08-20-2
Call to Audience
Meeting was adjourned at 9:25PM
James Fausone – Secretary/Treasurer