Tuesday, December 7, 2010

November 3, 2010, Minutes

Present: Sheila Thompson (Chair), Rose Marie Bradshaw, Randy Chong, Kathy Foster, and Tom Wang. Also present were Kate Potter, library director, and P.J. Wright.
The October 28 minutes were approved.
The meeting agenda called for examination and discussion of the library budget, and the proposed $31,000 in funding cuts being required by the city. The city’s finance committee will hold its budget approval meeting on Thursday, November 4, 2010. Sheila noted that the board doesn’t need to make the requisite cuts prior to the city’s meeting. She will notify the city in writing that the library board continues to explore its options and will have decisions at its regular board meeting, scheduled for Thursday, November 18, 2010.
Board members reviewed the City of Deer Lodge letter that was delivered Thursday, October 29. The letter outlined specific cuts for $4,950 (above the $5,000 in cuts already approved by the board) and reiterated its request for $21,000 in additional cuts to the library budget due to overages in the FY 2010 budget. Sheila explained that, although the city is requesting the $4950 cuts, it appears in the preliminary budget as though the finance committee already incorporated those cuts into its budget. It was noted that only the library board has the legal right to make cuts to the library budget.
Sheila has been in touch Bob Cooper, director of statewide library resources for the Montana State Library. He agrees that the board needs more information before making any decisions and suggested that the public needs to be informed of the situation.
Sheila asked City Clerk Donna Seaton this morning for more information on the negative $16,000 reflected in the FY 2010 budget. Donna did not have the information. However, budget documents were delivered to Sheila at 5 p.m. this evening. She will review them and have copies made for the board.
Tom noted his agreement with the need for more time to study the budget.
Sheila explained that Ed Hebbe, the city’s finance committee chair said in the recent budget review meeting that the committee could do an amendment if the board hadn’t yet made cuts. Hebbe also said the city could loan the $21,000 to the library. The funding would have to be paid back in seven months, the end of FY 2011.
In reviewing budget documents, board members noted that tax revenues have gone down. Personal property tax revenues are down more than $7000 down. Sheila said reduced revenues will likely continue to be a problem. Kathy asked if there have been similar problems in past years, and could it be a reflection of the transitional period until back taxes are collected.
Randy noted that revenue information for the previous three years is in one of the reports shows that personal property taxes have been significantly lower. Sheila also noted that the Bresnan Franchise Fee has gone down. (Attachment A)
Sheila perceives two immediate issues before the board:
1. The immediate problem of the $21,000 in cuts to the budget.
2. If revenues continue to be low, the budget will have to be adjusted down even more for next year.
Randy asked about the city’s response to the initial $5,000 cuts the board made to compensate for the payout to the retiring director.
Sheila explained that on October 12, she delivered a letter to the city clerk detailing the cuts. On Monday, October 26, the mayor called requesting that she and Kate come in for a meeting the next day. That was when Sheila was informed that $5,000 more needed to be cut from the library budget and an additional $21,000 on top of that. There was no feedback about the initial $5,000 cut made by the board.
Tom clarified that the city is actually asking for $31,000 in cuts to the library budget, which Randy observed is more than 25 percent of the total budget.
Rose Marie said that she had understood that $10,000 for Nancy’s retirement would come from another source, not the library operating budget. Board members discussed not being informed by the city of the need to adjust the budget.
It was noted that foundation member and county councilman Dwight O’Hara – at the recent city budget hearing – cautioned the city that it needed to create an accrual account so this problem doesn’t occur in the future.
The group discussed the Montana Code Annotated documents that city had included with its budget letter to the board. At the recent city budget hearing, finance committee member Carla Rydeen asked repeatedly if the board had read the documents and understood what it was they were supposed to be doing. Rose Marie wondered if the implication from the city was that board members should have been checking with the city about the budget and the pending retirement payout.
Kathy and Sheila will be going to a conference for state library trustees being held in Missoula on November 6, where they hope to learn about more options for the board to consider. Sheila added that Bob Cooper has said other libraries have gone through the budget crisis – the difference being Kohrs is going through the cuts three to four months after the other libraries, which had their budget information available at the beginning of the fiscal year.
Sheila suggested the board create budget committee. This will be considered at a future meeting. Also, the board needs to look into creating a library district or a county library.
Kate then handed out a document just provided by the city clerk that reflects the library budget is over for the first quarter of FY 2011. The document doesn’t reflect tax revenue still to be collected. (Attachment B)
Kathy and Randy both observed that those taxes are not collected until November so they will be in arrears. Kathy added that the report should reflect revenues actually collected and revenues still due to be collected.
Board members that discussed several options to deal the budget shortfall:
· Fundraising.
· Cuts to library hours of service. Sheila reported that cuts to service hours would bring the library below mandatory state library standards. Her calculations indicated that closing Saturday, and cutting two hours each on Tuesday, Wednesday, and Thursday could save $6,000 over 30 weeks (the remainder of the fiscal year.) Sheila does not want to consider cutting library hours as a top option.
· Memorials to the library.
Kate’s resignation was then discussed. Sheila later noted that one option is not to fill director’s position for two to three months to save funding on salaries.
Tom said he had talked with foundation chair John Skibsrud, who said the foundation may be able to help with funding.
Kate added as an aside, the foundation is funding the repair to the lighting upstairs in the circulation and children’s areas ($1,540).
Tom suggested checking with the foundation for fundraising options.
Rose Marie asked how people could make contributions to the library to help with the funding shortfall. Kate had checked with Elaine Way, treasurer of the Friends of the Library group, which is a registered 501 c 3 organization. People can make contributions to the Friends group, which can then contribute funding to areas that are cut – e.g. the book budget.
Randy pointed to the library statistical report reflects $17,000 in additional income in FY 2010. Where did that funding come from? (Attachment C) He observed that the library budget – with the exception of the retirement payout – is very much in line with previous years. He also asked how the library got to be only city department with a negative line item in the budget.
Board reviewed the report, which reflected funding as $70,000 from the city, approximately $3,000 from the state, and other income as $17,000. Randy noted that the $17,000 a fairly significant increase from previous years’ budgets. Where does the $17,000 come from? Kate posited that the funding was from donations, foundation money, and collected fees.
Rose Marie noted that, for FY 2011, the Deer Lodge Women’s Club will be giving the library $1,200, and the Powell County Literacy Board will be contributing $500.
Randy said the salary line clearly shows the $10,000 overspent in FY 2010: $100,000 with a $90,000 budget.
Members again discussed whether the former director’s severance should come from the library budget. The funding should have been already paid the city by the employee. It reflects the lack of an adequate accrual system for the city. Kate said that Bob Cooper’s opinion was that library board could be held accountable for the payout.
Next, the board discussed the possibility of requesting a mill levy increase, which would require a special election that couldn’t be held until sometime in 2011. The possibility will be explored further.
Tom expressed his preference for fundraising such as 1,000 people giving $20. He is against borrowing funding from city.
Sheila will contact John Skibsrud as to whether the board can borrow funding from the foundation instead of the city.
The board also will work with the Friends group, which would need to be in charge of any fundraising efforts.
Sheila will take a letter from the board to the city prior to tomorrow’s finance committee meeting, which is being held to approve the budget. It will state that the board is carefully considering all options and will report once decisions have been made on any budget cuts. The board will convene again at regularly scheduled board meeting at 5 p.m. on Thursday, November 18. Tom reiterated the need to emphasize the short notice that had been given and the need to continue exploring options.
Before adjourning the board discussed interlibrary loan postage needs and the cost of copies and printing. Kate will provide information for the next meeting
Kate suggested that the board approve the city’s additional budget cut request of $4,950, to show a good-faith effort by board. (Attachment D)
Randy noted that what city proposed is not out of line with previous years’ budgets.
The board’s letter to city will reflect protest of the city making the actual cuts in budget prior to board approval.
Kathy made a motion to accept the $4,950 cut, with the question of its legality being noted. R or T seconded the motion. The proposal passed unanimously.
Sheila will contact the foundation prior to the next board meeting.
Tom asked about the possibility of a special board meeting after Sheila and Kathy attend trustee conference over weekend.
Respectfully Submitted,
Kate Potter, secretary
Note: Attachments can be viewed at the library.

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