Hello everyone - First, thank you to those of you who responded to my inquiry earlier this month. Several of you were interested in the responses I received, so I've compiled them here. I generalized all of the libraries just in case any of you preferred that I not share your specific information with the group. Some very good information was shared as well as insight into potential ways of addressing our building/funding issues. I will likely be contacting a couple of you directly in the near future for additional information. Again, thank you! *City Library “A”* “As I understand it (and I am not a lawyer), the governing board should annually tell the City how much of the approved library millage to collect. The board should also approve the budget for the library. If the board wishes a portion of the budget to be reserved for capital improvements, they could approve by resolution a designated capital improvements fund, and budget for a transfer to that fund. Then in years when an improvement is needed, they can tap into that reserve fund. However, since the city owns the building, perhaps they should be responsible for improvements. City Library A prepares a 5 year capital improvement plan which is approved by City Council every year. This document helps the City plan for needed/desired improvements. If your City follows a similar procedure, you might want to push for your building improvements to be added to that plan. A caution about City owned buildings. If the City owns it, the City can sell it and keep the proceeds. This happened to City Library A in 2006. So, before you decide to use library millage for capital improvements to property you do not own, you might want to have a legal document drafted clarifying the relationship between the City and Library. *City Library “B”* “City Library B does levy 2 mills (one voted on by the community--10 year levy and one that is done by the City Council with a vote of the people per PA 164) The City has a Capital Improvement Plan (5 year plan) that it puts money into. Building improvements, etc. come out of the library's budget for the most part. There was some City money for a fire alarm system. The FY16 budget does not have any City money allocated for capital improvements. Due to budget issues, the City has pushed back repairs on the library (which is a city owned building) and then has removed the money all together so that our fund balance is being allocated for major roof repairs and a fire suppression system (believe it or not the library has no fire suppression system and just got a fire alarm system). I hope this helps. It is not necessarily good news but it sounds like we are in the same boat for capital improvements.” *City Library “C”* “We are a City library, and as far as I know, founded by City Charter. The ordinances of the City state the City will provide library services for their residents, so I think we're in the same situation as you are. Our facility was built in 2007 using library funds and a bond that we are still paying off out of our general fund (final payment is April 2016, so we're getting close!). I believe, although I am not 100% certain, that the building and grounds are owned by the City because we are a department of the City and not really a legal entity in our own right, especially because of the bond, which is held by the City. We pay almost all of the maintenance and repair costs for our facility and surrounding grounds (including parking lot, sidewalk, etc.). Capital improvements are paid for out of the library's operating budget. A redesign project was completed in 2008 that I believe cost approximately $70,000 and it was all paid out of the library's fund balance, library grants, private donations, and our operating budget. I would consider that a fairly big capital improvement, although structurally the building was unchanged (new carpet, new shelving, painting of almost the entire interior, new computer station furniture, a larger circulation counter, a large custom art feature/book shelf for the children's room etc.). The City for many years did not assess any millage for operating the library. For a period of time, they annually transferred a portion of money from their general fund into the library fund. This was before my time, but I think $25,000 was typical in the final years before the library director and library board convinced them to levy the full 1 mill authorized to be levied by act of City Council instead of a public ballot initiative. Whatever the City apportionment was, it didn't cover the annual cost of the building payment. I think from 2006 to 2014 they levied the full 1-mill, but since the annual building payment cost over 80% of the millage revenue, I doubt there was any real consideration to decrease that levy. When they decided to levy the mill for operating expenses, they stopped budgeting any money for the library out of their general fund. I was told by the former City Manager that City Council expected to decrease or do away with the 1-mill levy as soon as our building is paid off. That doesn't mean the library board wouldn't have prevailed upon them to continue the levy, but I think it is a fairly strong indication the levy was primarily in place to cover the debt. Last year, we took a millage proposal to the public at the County level (so the six public libraries in the county joined together to get the measure on the ballot with the understanding that if it passed the funds would be distributed to each of the libraries based on their service areas). It was for .5 mill and it passed. The City will be decreasing their local levy to at most .5 mill so residents are not paying more annually than they were before. This was my suggestion. Its still an overall increase in revenue because we will now receive millage revenues from townships we serve, whereas previously it was only residents of the City that paid the millage. I fully expect that once the building is paid off the City will no longer levy the local millage and will only reinstate it if in 7 years the renewal of the County millage fails. It concerns me slightly that the County Commission will have the discretion to not levy the entire .5 mill (less Headlee rollbacks), but there's not much I can do about that. I was told it is unlikely they will levy a lesser amount unless the libraries do not fully utilize the millage funds from a maximum levy.” *City Library “D” * I wasn’t clear from your email if your library is a General Fund library, or if you have a dedicated millage? (Clarification note... SJ is a dedicated millage set in the City Charter... not General Fund or set City Department) So I am not sure how best to answer your question, but here’s the best I can do: City Library D is a City library founded by a City Charter. Until August 2011, it was a department of the city, and its operations were paid from the City’s General Fund. However, in August 2011, a dedicated millage was passed, so while City Library D remains a department of the City, its funding comes from this dedicated millage and whatever revenue the Library generates. When City Library D was a general fund library, all of its expenses—operating and capital—were paid from the City’s General Fund. In other words, the City was responsible for EVERYTHING. We had an Advisory Board, but they were advisory only. They could advise us (as they used to do) that we should have a $1 million collection budget, but at the end of the day, this was up to the City Council. That’s why City Council ultimately abolished the Library Advisory Board, b/c essentially, they had no power or authority to make changes @ the Library, and other mechanisms are in place as far as Citizen Input and advisory. As a General Fund Library, the Library was in the queue with all of the other City departments in terms of funding—we may have needed some improvements, but the Fire Truck/Road Repair/Police Tasers, etc, came first. So it’s not like we got everything we wanted when we wanted it. Now that the Library has a dedicated millage, all expenditures—operating and capital—are supposed to be covered by this dedicated source of revenue to the Library. In other words, Police/Fire/DPW can’t use library millage revenue for their operations. Having said that, for the 2015-2016 budget year, due to the fact that the library has had some significant building issues, and the millage will not cover general operations + library collections + all of the building repairs, it is being recommended that the City contribute approximately $170,000/year for the next 4 years to the library, for critical building repairs. This is part of the budget process, to be discussed at the end of this month and voted on by City Council in May. City Library D’s millage is 0.70 mils, and the City levies all of it. Anything the library doesn’t spend goes into its fund balance, which is being used for critical building repairs as well (doesn’t cover the full cost, hence the City contributing $170,000/yr, possibly). The City also levies its full millage amount, and a portion of that does go into the City’s Capital Fund. But that covers roads, fire stations, all City Capital needs, of which there are many.” -- Stephanie Masin, Director Maud Preston Palenske Memorial Library 500 Market St. St. Joseph, MI 49085 269-983-7167 (phone) 269-983-5804 (fax)