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‘Autonomous’ Library Board Still Reliant on City

Though the Evanston Public Library is legally autonomous, it will be financially reliant on the City of Evanston for the near future. Can the library board operate successfully with such contingencies and will it ever become wholly self reliant?

It has been almost a year since by adopting a library fund model, but only in the past few months has the board been forced to take up the new responsibilities that accompany their decision.

For the first time ever, the board will have the ability to determine how much funding the library gets in the coming year by levying a tax as a percentage of the money the city receives from property taxes. While this seems like an ideal mechanism to alleviate recent financial concerns and even expand neighborhood services, the transition to the new funding model burdens the board with a new set of considerations, including and acutely weighing its own interests against the city’s desire to cut spending amid economic concerns.

Debate surrounding these subjects dominated conversation at Wednesday night’s four-hour-long library board meeting.

In past years, the library board has submitted a budget to be approved by the city council, creating a financial plan within the allocations the city provided while constantly pushing for a few more dollars. Now, the newly autonomous board can bypass the city entirely during the budgeting process, but is still scurrying to get the city a detailed financial plan by late September.

Why?

The board’s decision to receive funding through property taxes has created a problem; the library currently relies on city funds, has no money of its own and will not receive its allotment until property taxes are collected and distributed by Cook County, potentially leaving the library to operate for several months without even a dime.

The city, recognizing the conundrum, has agreed to loan the library operating expenses in the meanwhile, but not without a few stipulations.

The memorandum of understanding between the city and the library board, though currently incomplete and unsigned, includes a date by which the board must submit a budget to the city council. At Wednesday night’s meeting the board voted to resubmit an amended version of the document, which now gives authority over library personnel matters to the library board (instead of the city’s submission that such responsibilities fall to the city manager), but allowed the city to maintain ownership of library properties.

Additionally, the board’s reliance on the city will affect how both the library budget and tax levy rate are determined.

A document reviewed by the board Wednesday night compared the library’s FY2011 budget (adjusted for a 12 month fiscal year) to an extrapolated FY2012 version created as a starting model under the assumption that library hours and services would remain at current levels in the coming year, and adjusting for a 2 percent increase in personnel costs and other expenses. The resulting number crunch reveals a potential $434,000 increase in expenditures.

In total, if the board were to adopt the FY 2012 budget as is, it would need to increase revenue by as much as 9 percent, according to board members.

But nothing is written in stone, said board member Diane Allen, and the board is simply assessing its options.

“The purpose of this exercise tonight is that we need to start, as a board, recognizing that we have a long way to go before we start determining what that tax levy that we send to the city is going to be,” Allen said. “This is just the beginning.”

Allen said that if the board submitted the theoretical budget, it would likely be rejected by the city.

“Are we actually going to propose a 9 percent increase in order to get $434,000 when we hear the city saying, ‘we’re looking for no increases by city bodies,’?” Allen asked. “[The city is asking for] a zero increase or a cut…."That is not going to compute well when the budget gets sent to the city"…and if it doesn’t compute well, the city will undoubtedly look at that and say, ‘well, you’re not 100 percent a fund now. We’re really working with you on this. You need to work with us on this.’”

Allen insists that the board would take the city’s economic concerns into account when budgeting even if the board were not still financially reliant, saying that the library was still responsible to Evanston residents who would have to shoulder a property tax increase.

Though the board can legally raise their tax levy rate as high as .23 percent, their current budget expressed as a levy would equal roughly only .128 percent.

But if the board is hesitant to ask for a 9 percent increase in revenue, then they must begin making cuts from the extrapolated FY2012 budget examined Wednesday.

Newly-appointed board member Benjamin Schapiro said that the hypothetical budget did not provide enough detail to assess where potential cuts could be made because the document failed to differentiate between fixed and flexible costs.

However, even if the board sensibly trims the budget, its proposed $100,000 operating reserve is only enough to cover the library’s operating costs for near seven days, begging the question: once the library board has paid back the city’s loan, short of significantly raising their tax levy rate, how will they accumulate enough reserves to ever become wholly financially independent in the future?

The answer may be that it will simply take time.

The library board’s memorandum of understanding with the city has a proposed two-year length.

The library board will hold meetings August 17 and 31 devoted entirely to resolving budgetary and memorandum of understanding issues.

 

Correction: The $434,000 amount includes the $100,000 operating reserve and $100,000 capital reserve. The original version of this story said that it does not.

Lori Keenan July 21, 2011 at 09:23 PM
Wow, Jordan, excellent reporting on a truly complex issue! Here's a question, though, in terms of real dollars to taxpayers, what would a 9% increase in the Library's portion of the budget really mean? That part isn't clear. In other words, on a hypothetical $5,000 tax bill, aren't we talking about less than $20? Personally I'd rather have my money go for things like the Library than buying awnings for private businesses all over town, like the $11k Council just gave to Hecky's. I'd prefer that they had spent $50k to fund The Mighty Twig than $40k to a private developer just kitty-corner from that same location. If the City is asking departments to tighten their belts, then why do they keep giving away money to private companies in the name of "economic development" Public Libraries help economic development, returning as much as $9 for every $1 spent. Let's invest in Evanston's future in a truly constructive way. The Board should continue to stand tough.

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