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2011 Budget Process Underway for CPL

The budget outlook for the library remains bleak in 2011. As I wrote last year, the deepening recession and declining property values mean less money coming in to the library — 95% of our 2010 revenues come from taxes Canton property owners pay to support library programs, collections, and services — which means more cuts for the next several years.

In 2011, our budget will drop another $300,000, to $4.9 million, bringing our cumulative total cuts since 2008 to $1.6 million. $4.9 million is the size our budget was in 2004, when we served 15,000 fewer people, checked out 600,000 fewer items, and had 40% more staff.

The library board, library administration, and library staff have cut our budget from $6.5 million in 2008 to a proposed $4.9 million in 2011. The $1.6 million in cuts represents more than just a 25% drop in revenue — it represents fewer materials, fewer classes, fewer services, longer lines, longer phone holds, longer waits for popular materials, larger class sizes, and a staff who are stretched thin. We have made investments in equipment and technology to help us cope somewhat with fewer staff and increasing usage, and implemented efficiencies in our processes and workflows to save time and money. I cannot say enough about the hard work and positive attitudes of my coworkers.

Many area libraries are cutting daily hours, closing permanently on certain days, and instituting furlough days and staff layoffs. Many of you have spoken to me personally about the Troy Public Library's pending complete closure in June 2011, Wayne Public Library's permanent closures on Sundays and Mondays, reduced hours at Farmington Community Library and Garden City Public Library, and mandatory furlough days at Bloomfield Township Public Library, and your concern that CPL may be headed down this path. The honest truth is that we may — despite our best efforts to continue our services to families, children, parents, teens, business owners, job seekers, older adults, aspiring citizens, and returning students — be implementing some of these cost-cutting methods.

Work on the library's 2011 budget has begun, as has work on projections through 2013. The outlook is grim — we anticipate that our 2013 budget will take us back to our 2001 funding level of just over $4 million. The library board and I remain committed to making the tough decisions necessary to craft the required balanced budget. The draft budget will be presented to the library board at their August 19 meeting, and the budget hearing and vote will take place at their September 16 meeting. Both meetings begin at 7:30PM and are open to the public. We value your suggestions, opinions, and ideas as we continue to weather this financial storm.

Best,
Eva M. Davis
Eva M. Davis, Director

Comments

polly anne 2030
Sun, 2010-07-25 19:07
After reading your 2011 Budget report, it comes down to common sense. The Canton Library has MANY things to offer, but you have to start drawing the line some where. A few suggestions: A FREEZE on hiring for all departments. Stop purchasing so many "new books", and also on purchasing too many copies of new DVD's, cutting back hours on the weekends. These are just a few ideas that may help cut costs. Also, you might have no choice but to cut the hours on weekends. Maybe have the library open Monday-Saturday. Although, one day might not make much of a difference, think about all the other libraries in the area that are making major cut backs. I'm sure that these cities mentioned above, do not want to close, cut hours,etc.,etc. We're all in this recession together. It's time for Canton to do whatever it takes to help save the library money, and at the same time continue to serve the patrons in the most professional matter as the library has always shown.
eva
Tue, 2010-07-27 11:11
Thank you for your comments, polly anne 2030. We have over the last three years made the changes you suggest, and this has allowed us to cut $1.6 million from our budget so far. Thank you for your support of our services, and your views on closures.
xmodz
Sun, 2010-07-25 23:44
Do NOT cut weekend hours. If any hours are cut, you should do it during the work week since MOST people are in class or at work during the day Monday through Friday. The weekend and evenings during the week are the times when students and the general population have more free time to attend the library. Try opening the library at noon during the normal work week or even open later on saturday as well to match that noon opening hour. That way the library will open at noon every day of the week. Something like that would be about the same as cutting out a whole day or so from the library's operation every week. Try cracking down harder on late fees and be strict about collecting late fees before any new materials can go out. Perhaps even raise late fees a tiny bit as well. Not a lot! Just a little hike in the fees to help raise some extra money.
eva
Tue, 2010-07-27 11:24
Thank you, xmodz. You are correct that weekends are our busiest time, as are evenings. We are required to be open a minimum of 60 hours per week to receive our state revenue sharing funds. Currently we are open 72 hours per week. Closing on Wednesdays or Thursdays--our slowest days for visits and checkouts--would take us down to the 60 hour minimum and would allow us to cut that workday from library staff salaries. Shifting our opening or closing times so that we open later and/or close earlier would allow us to shift existing staff to different hours, but would not help us realize as much money in salary savings as an all-day closure. That's not to say we have made a decision--everything is up for discussion.

We continue to work with patrons to negotiate payment arrangements for their overdue fines and replacement fees. To do otherwise is to deny the very dire financial straits our neighbors are in. If we have made an error, we will of course take that into account. Our new automated checkin and sorting system has largely eliminated our human errors and made checkin more consistent, which means fewer errors on your account. It has also helped us cope with staff reductions due to our budget cuts, enabling us to keep up with the 2 million items we checkout and checkin each year despite having fewer staff.

Standardizing our overdue fines to bring us in line with what our neighboring libraries charge is under consideration. Interestingly, the Capital Area District Library in Lansing raised their overdue fines to generate more revenue, and discovered that their fine revenue actually went down--not up--because people returned their items on time to avoid the higher charges. For us, fines are incentives for people to return their materials on time, and punishment for those who don't. Fines account for about 1% of our revenue, and we don't "count on" them to keep us afloat. If we were to count on fines for funding our services, we would have to set fines at an astronomical level--$5 or so per day. We don't want to do that to you!

georgek1029
Mon, 2010-07-26 11:16
I have to say that the budget cuts were not unexpected. But, the "silver lining" is that the CPL is to remain open - is it not? Some communities have not been that fortunate. Using volunteers to teach computer classes may be sufficient, I know it is a hard decision to make - but better than cutting out classes altogether. My work at another public institution (the Historical Museum) has shown that auctions can generate some income - but it is probably too late to have such a thing in this calendar year. Perhaps some of Canton's notable residents (this might be a link: http://en.wikipedia.org/wiki/Canton,_MI#Notable_residents) might be able to help with donations.
eva
Tue, 2010-07-27 11:29
Thanks, georgek1029, for pointing out that donations to the library are always accepted! Writing "operating fund" in the memo line of your check ensures that the money will reduce our deficit.

The Friends of the Canton Public Library fund the majority of our programs, and in 2011 the Friends have committed to paying for all of our programming costs. Their donations are instrumental to our success.

I encourage you to shop at the Friends' Secondhand Prose used bookstore; the Friends donate the proceeds from Secondhand Prose back to the library to help us weather this recession. Materials donations are accepted at the back of the library (look for the signs) and the Friends Volunteers do a great job of sorting and pricing them for sale.

QuickGame
Wed, 2010-07-28 15:17
Thank you for this information. The one question that comes to mind is: When did we start being like everyone else? Personally, I think superior services are offered in this community. These are services that help foster a stable environment conducive to both business and residents. One worry that I have is that with a lack of long term planning, the Canton Public Library (while maintaining a high demand), will begin to resemble some things we have seen in other communities. I, for one, did not move to this community to watch things slowly mesh into some of the desperate situations we are seeing when it comes to services in many other parts of the Metro Area. There needs to be a long term plan. Revenues will continue to drop year after year as property values decline, it's a given. As an example, the library is closed Thursdays next year and staff receive mandatory furlough days (leading to fewer programs) in order to close the 2011 budget gap. Everything is fine until the middle of 2011 and uh-oh there is another $250,000 gap to fill. I commend the Library Board for their consideration to reset the millage rate they dropped two years ago. They were able to save me approximately $14 over two years by cutting the rate back in 2008, but the Library will be in a much better position by accepting these funds. In my mind we have come to a point where there is one solution. That solution is a full headlee override vote resetting the millage rate to 2.0 mills. Problem solved - long term. This would involve a marginal "increase" on the tax bills. My taxes have been decreased by more than 6x this marginal "increase" in the last two years, and given property values, I think most people will be in a similar boat. I would like to point out that if this becomes a serious consideration, the Library Board would have until August 24th to get this proposal on the November ballot. It would come at no cost due to the Statewide November General Election. It would also give the maximum number of residents a chance to have their voices heard. One thing to remember about this proposal: It would only restore the rate to what was initially approved (before our faulty Constitution eroded the rate), and due to the decline in property values, just about everyone would pay LESS than what they were when the rate was initially approved. We should be leaders; we should maintain WORLD CLASS service while everyone is cutting back, fostering a STABLE atmosphere for both residents and businesses. Thank you for the opportunity to comment.
eva
Mon, 2010-08-02 10:25
Thank you, jb1182, for commenting. The recession is not selective in the communities it affects; in that respect we are like everyone else, and our entire community is feeling the repercussions of the recession.

A few months after I started here in 2008, the administrative team and I began to forecast and plan for cuts; we have this planning to thank for the pretty good position we are currently in, which is better than many libraries (although not all) in southeastern Michigan. We have communicated all along about our financial status and actions we've taken already and plan to take in the future to maintain a balanced operating budget, and I am disturbed that you would call that a lack of a plan.

We take our obligations as public servants seriously, and my staff work hard every day to be good stewards of your tax dollars. When there are fewer tax dollars, our programs, services, and collections must be altered to adjust to the new financial reality. To do otherwise is to be irresponsible. Our goals in communicating our budget situation openly these last several years are to open a dialogue with you, and to gather your feedback as stakeholders in your public library.

I appreciate your suggestion that a Headlee override vote take place to restore the original millage rate of 2 mills approved by the voters of Canton in 1979. As you note, Headlee has eroded the current levy to a maximum of 1.5437 mills. Unfortunately, your assertion that a Headlee override would provide a long-term solution at minimal cost is not necessarily true. The Headlee amendment continues to apply, and the millage rate erosion will resume. The immediate increase would be more than marginal: A home with a market value of $200,000 (SEV $100,000) would see its annual library taxes increase 30%, from $154.37 to $200 annually.

Your assertion that a homeowner would pay less today with the millage restored to 2.0 than what they were paying when the millage was initially approved in 1979 is also incorrect. For a home that was valued at $75,000 ($37,500 SEV) in 1979, the homeowner's library tax payment was $75 at 2.0 mills. All other things being equal, that same home today is worth about $180,000 ($90,000 SEV), and if the millage were reset to 2.0 mills, their library tax bill would become $180. That is an increase of $105 compared to what was originally approved, not less.

That said, a Headlee override is something we will consider for the future, and I thank you for your strong support of it. I hope that you are a member of the Friends of the Library, our fundraising and advocacy group; if not, please consider joining. The Friends contribute their time and labor to make this a great library.

We would certainly not refuse your check if you choose to donate the difference between the 1.5437 and 2.0 millage rate for your home to the library's operating fund, and I hope you will consider doing so given the thoughts you've shared here.

publius
Fri, 2010-08-27 07:23
At the August board meeting there was discussion of the library fund balance or contingency fund. At least one board member was strongly opposed to using this fund to help alleviate operating budget shortfalls in 2012 and 2013. This left me with several questions about this fund and its purpose. First, how much money is in this fund? Is there a minimum balance that must be kept in this fund? What are the current obligations being paid for from this fund? There was discussion at the meeting about paying for debt service through this fund. How much does this cost annually? Is this fund in place to pay only for emergencies or large equipment replacement or repairs? Barring an unforeseen catastrophe, what would be reasonable to budget for these expenses? Is this fund replenished as part of the budget process? The reason I ask these questions is that the library is facing a near-term budget shortfall. There is discussion about further severe cuts to programs, materials and staffing that have already been drastically reduced. If this is a fund to respond to emergencies, it seems like the current situation qualifies. This is not a case of trying to put off hard decisions, since there have already been painful cuts and there will be more even if part of this fund is tapped. While no responsible manager would advocate covering operating budget shortfalls completely with the fund balance, it does seem reasonable to use part of this money to help weather this storm while also protecting the library against unforeseen events. This could be re-evaluated every year, or sooner, if necessary, with the priority being placed on making sure there is enough money in this fund to cover other real or potential contingencies. I am not advocating putting the library in jeopardy by lowering the fund to a dangerous level, but in this situation an overabundance of caution can have very damaging consequences to the library’s mission and reputation for excellence. I realize these are very difficult decisions and my concern is that every avenue be completely explored without pre-conditions. Thank you for providing this forum to ask questions.
eva
Sun, 2010-08-29 15:37
Thank you for your comments and questions, publius.

At the end of the 2010 fiscal year, we project about $2.7 million in the fund balance. Our auditors recommend that the fund balance be kept at about 30% of our revenues; there is no legally-mandated minimum.

The library's fund balance has been used to pay for one-time expenses, typically capital expenses, rather than ongoing operating costs. For example, the capital investments made in improved technology (our new RFID system and equipment), plus any major repairs or replacements of mechanical systems, building fixtures, or other equipment (carpeting, roof, windows, HVAC units) for our aging building.

The library building bonds are payable through 2020, at varying interest rates each year, as set forth in the original bond issue. The remaining annual debt retirement payments range from a low of $494,000 to a high of $547,000.

At the end of the fiscal year, in accordance with state law, government accounting standards, and generally accepted accounting practices, any excess revenues over expenditures are added to the fund balance. I am proud of my staff for their diligence and good stewardship of the tax dollars we receive. Their efforts have allowed us to contribute to the fund balance each year that I have been here.

Conversely, if actual expenditures exceed budgeted revenues at the end of the year, the library is required to make a fund balance transfer to cover the shortfall. We have a thoughtful, focused budget process and are careful when making the following year's budget to ensure that we live within our means, so this situation has not happened in the history of the library--again, this is a testament to my staff's excellent stewardship, as well as the planning and forethought of the library board. I'm pretty confident that if I were to allow our spending to exceed our revenues, I would quickly become the "former" director.

It sounds as though you attended the August board meeting, in which case you already know that the board has committed to ongoing discussions about our falling tax revenues as a result of declining property values, and how it affects our ability to serve this community to the level to which you are accustomed.

With a budget that was $6.4 million in 2008 and is expected to drop to $4 million in 2013--a 38% decline--the bottom line is that we cannot afford to provide the same services, staff, collections, or programs that you are used to receiving. Every member of the library board is also a library patron and a Canton resident, committed to developing the best library possible given the dire economic situation. We are exploring, and will continue to explore, every avenue to maintain the delicate balance between community demand and our budgetary constraints.