HomeMy WebLinkAbout2016-05-18 - Agendas - FinalFAYETTEVILLE PUBLIC LIBRARY Kim Agee, President Maylon Rice, Treasurer Susan Graham We inspire imagination and foster learning. Board of Trustees May 19,20153 pm AGENDA Special Meeting Walker Meeting Room Brenda Boudreaux, Vice -President Hershey Garner, Secretary Janine Parry Suzanne Clark I. Call to order II. Authorize K. Agee to sign agreement with Washington Regional regarding use of City Hospital property — page 2-3 III. Discussion of Long -Term Revenue Committee Report — page 4-11 IV. Public Comment V. Adjournment Attachments: Minutes from Long -Term Revenue Committee meetings -:�- WashingtonReg ional Medical Center 3215 N. North i-Iills Blvd, Fayetteville, AR 72703 Phone: (479) 463-5018 Facsimile: (479) 463-5977 May 15, 2015 Mr. David Johnson Executive Director Fayetteville City Library 100 W. Mountain Street Fayetteville, AR 72701 Re: Fayetteville Public Library Request to Use Fayetteville City Hospital Parking Areas Dear David: The Fayetteville Public Library ("FPL") has requested permission to utilize the parking areas located upon the former Fayetteville City Hospital real property that is owned by Washington Regional Medical Center ("WRMC") in connection with the 2015 summer reading program that will be offered by FPL. It is my understanding that the parking areas will be utilized by FPL staff, volunteers and the general public. In lieu of entering into a formal lease agreement and the attendant costs that would be incurred by both WRMC and FPL related thereto, WRMC will agree to permit FPL and its patrons to utilize the former Fayetteville City Hospital parking areas and grass areas and excluding the city hospital building on condition that FPL will pay any and all insurance deductibles that may be incurred by WRMC in the event WRMC should submit a claim to its commercial general liability insurance carrier as a result of any claim for personal injury or property damage that may be related to, occur as a result of, or arise from the activities of FPL which are conducted upon the parking areas of the former Fayetteville City Hospital. WRMC maintains a commercial general liability insurance policy through CNA Financial that covers the former Fayetteville City Hospital parking areas with limits of $1,000,000.00 per occurrence and $3,000,000.00 annual aggregate. The per claim deductible under that policy is $50,000.00. Mr. David Johnson May 15, 2015 Page Two If the above accurately reflects our mutual understanding and agreement, I would appreciate you and the President of the FPL Board of Trustees signing this letter and returning the same to me. Yours very truly, William . Bradley President & Chief Executive Officer Washington Regional Medical Center ACKNOWLEDGED AND AGREED: David Johnson Executive Director Fayetteville Public Library Date: Kim Agee, M.D., President Fayetteville Public Library Board of Trustees Date: Long Term Revenue Committee Fayetteville Public Library Memo To: Fayetteville Library Board of Trustees From: Long Term Revenue Committee Date: May 13, 2015 Re: Committee Report Introduction The Long Term Revenue Committee (LTRC) was charged with the development of possible funding actions to close a predicted budget gap beginning in calendar year 2016. This memo includes eighteen (18) revenue generation and/or expense reduction options discussed — some of which are being recommended for consideration by the FPL Board of Trustees (Trustees) for implementation. The LTRC's was tasked with addressing the fact that although operational funding revenue for Blair Library is growing just under 2% per year, expenses (due to exponential increase in user demand) are growing at 3.5% on average. In 2015, the library is operating with a balanced operational budget and all critical capital needs are funded with the exception of library materials. This balanced budget for 2015 was possible after $502,000 was removed from the Library's 2015 plan. Attachment 1 is a recap of the budget reductions implemented for 2013, 2014 and 2015. Table A presents an excerpt from a nine (9) year budget summary that forecasts revenue needs from 2015 through 2023 based on current operating strategy with no increase in total employee headcount. Predicted additional revenue needs in 2016 total $619,300 and are expected to reach $1,543,500 in 2023. This increased revenue need is to keep the library functioning as it does today without any increase in total employee headcount. The LTRC discussion of current Blair Library funding needs also considered future library funding needs: the need for expansion of the current Blair Library based on the 2030 Master Plan, the City Hospital land purchase, and the current legal status of the City Hospital property sale, for which a resolution is not expected until mid-to-late 2016. The LTRC's recommendations do not address these long-term funding needs. The LTRC discussions point to several short-term actions that will provide budgetary relief, but a long-term sustainable solution will need to include a voter approved millage levy. The LTRC emphasized the amount of millage and the election timing should be determined by the Board of Trustees, based on the short-term action recommendations outlined in this memo, as well as longer-term considerations. The latter would require a millage level above the current 1 mil. The LTRC considered a wide array of cost-saving and revenue -generation options. We used, to quote committee member George Faucette, "a sharp pen." Table B presents all considered options and the LTRC viability assessment of each option. Each option was categorized by the committee as a "Non -Starter" or "Possible" action. A "non-starter" action was a possible revenue generator or expense reducer, but could result in negative customer satisfaction and/or unacceptable reduction in customer services. "Possible" actions could generate revenue or reduce expenses with minimal impact on library services or patron satisfaction. Long Term Revenue Committee Report Please note: these added revenues and/or expense savings are "soft" numbers based on our best guess with the information available. Table A— FPL Budget Summary 2016 — 2023 with Additional Revenue Needs Fayetteville Public Library Additional Revenue Needs Forecast 2016-2023 Budget year 2015 2016 2017 2018 2023 Primary Government Operations Transfer Book Transfer Property Taxes Transfer from Foundation Other Re enue (All Other Sources) Total Revenue - Current Sources Supplement from Savings Total Resources Annual Expenditures - Current Facilities Restore 2014/2015 Cuts E Book cost difference Equipment and Facility Updates Total Revised Annual Expenditures Additional Revenue Needs Current Mil Rate 2,083,400 2,102,400 2,166,400 2,183,400 2,277,400 1,677,400 1,677,400 1,677,400 1,677, 400 1,677,400 406,000 425,000 489,000 506,000 600,000 1,342,000 1,374,000 1,401,000 1,429,000 1,576,000 119,130 122,000 124,000 126,000 141,000 362,980 323,000 323,000 323,000 323,000 • 3,907,510' 3,921,400' 4,014,400' 4,061,400' 4,317,400 158,000 158,000 158,000 158,000 0 • 4,065,510' 4,079,400' 4,172,400' 4,219,400' 4,317,400 4,065,283 4,208,000 4,355,000 4,507,000 5,353,000 0 0 0 0 0 0 175,000 128,000 129,000 133,000 0 315,700 362,700 361,700 374,900 ' 4,065,283' 4,698,700' 4,845,700' 4,997,700 5,860,900 227' (619,300)' (673,300)' (778,300)' (1,543,500) 1.00 1.00 1.00 1.00 1.00 The impact on Additional Revenue Needs Forecast of removing: Supplement from Savings, E Book Cost Difference and Equipment and Facility Updates for 2015 through 2018 is depicted in Table C1 later in this report. Long Term Revenue Committee Report Table B — All Revenue and Expense Options Discussed and Categorized by LTRC. (Note: LTRC meeting minutes are attached to provide additional context for categorizations and discussions.) Table B: Item/Topic Listing Non Starter Possible 1. Close on Sundays and/o_ r Mondays ✓ $60,000 2. Furlough employees ✓ 0 3. Do not replace departing employees ✓ 4. Reduce the collection ✓ 5. Charge for parking in deck ✓ ✓ 6. Revise building policy to remove "keep in like new condition" 7. Reduce the number of DVDs that can be checked out (to decrease losses) ✓ 8. Eliminate special events and author events ✓ 9. Reduce/eliminate programs ✓ 10. Reduce lawn care contract/hired services ✓ _ 11. Millage increase (two elements: increased valuation and increased millage rate) (this analysis on addresses increased valuations) ✓ 12. Charge for library cards ✓ 13. Charge for meeting room use/ charge room rentals ✓ 14. Increase fines and fees ✓ 15. Increase Coffee Shop (Arsaga's) rent ✓ 16. Charge for events ✓ 17. Reinstate operating transfer from unrestricted endowment ✓ 18. Restrict Long Term Reserve to capital replacement ✓ The LTRC then evaluated the ten (10) options members considered "possible." Table C presents the projected budget impact for 2016 of each. The "net impact" of adopting all of the suggestions is $539,700. The Board of Trustees may choose to adopt any/all or none of the suggestions. If the Board adopts all of the suggestions then FPL still has a budget deficit of $79,600 to address in developing the 2016 budget. Table C Table C presents actions forwarded by the LTRC as "possible" as well as the estimated revenue generation or cost savings. The net impact — if all options were implemented at the recommended levels — would be $539,700. Table C: Possible Item/Topic Listing Summary Conclusion Predicted Dollars Saved or Increased Revenue in 1st Year 1. Do not replace departing employees Potential saving estimate is $50,000 annually based on recent patterns. $60,000 2. Revise building policy to remove "keep in like new condition" Also see Item 10 and Table C1 for additional information as Item 2 and Item 10 are related and Table C1 accumulates the budget impact of both items. Care of the building is paramount. Long - Term Reserve coupled with reserves for Technology, Facilities and Furniture & Equipment should provide adequate money for capital reinvestment through 2018. This would remove the $158,000 currently being transferred to the library's operating budget. 0 Long Term Revenue Committee Report Table C: Possible Item/Topic Listing Summary Conclusion Predicted Dollars Saved or Increased Revenue in 1st Year 3. Reduce the number of DVDs that can be checked out (to decrease losses) No direct dollar impact except for the potential of postponing some added purchases. $0 4. Millage increase (two elements: increased valuation and increased millage rate) Existing property values are anticipated to grow 2.4% from 2014 to 2015. (This addresses increased valuation only) $40,000 5. Charge for meeting room use/charge for room rentals The meeting room rates should be adjusted, especially those that are assessed to for-profit organizations. $28,000 6. Increase fines and fees A minor increase in fine rate is proposed coupled with adoption of no tolerance policy in that all fines & fees must be paid before additional materials can be checked out. $19,000 7. Increase Coffee Shop (Arsaga's Rent) Good business practice says FPL should periodically review rental rates but should do so in a manner that seeks to build on existing relationships $0 8. Charge for Events Continue to hold these events if sponsorships and/or fees can make them self-supporting. $10,000 9. Reinstate operating transfer from unrestricted endowment Release the $2.0 million for re -investment and restart the annual distribution to FPL. $60,000 10. Restrict Long Term Reserve to capital replacement/ Supplement from savings This designation will provide funding for capital replacements for a few years but will reduce operating revenues through 2020. The net impact is shown in this table. 332,700 Total "Net Impact" $539,700 Net Deficit to Close for 2016 -$79,600 Long Term Revenue Committee Report Table C1 Fayetteville Public Library Additional Revenue Needs Forecast 2016-2018 Budget year mil growth 2012 to 2013 1.98% 2015 2016 2017 2018 Primary Government Operations Transfer Book Transfer IT Transfer Property Taxes Transfer from Foundation Other Revenue (All Other Sources) Total Revenue - Current Sources Transfer from IT & Facilities Reserve Supplement from Savings 158,000 Total Resources ' 4,065,510' 2,083,400 1,677,400 406,000 0 1,342,000 119,130 362,980 2,102, 400 1,677,400 425,000 0 1,374,000 122,000 323,000 2,166,400 1,677,400 489,000 0 1,401,000 124,000 323,000 2,183,400 1,677, 400 506,000 0 1,429,000 126,000 323,000 3,907,510 3,921,400' 4,014,400' 4,061,400 Annual Expenditures - Current Facilities (2014 Adopted Budget adjuste' E Book cost difference compared to Hardback Books Equipment and Facility Updates to keep FPL inviting & energy efficient Total Revised Annual Expenditures - Current Facilities Additional Revenue Needs 4,065,283 0 158,000 158,000 158,000 4,079,400' 4,172,400' 4,219,400 4,208,000 175,000 315,700 4,355,000 128,000 362,700 4,507,000 129,000 361,700 ' 4,065,283' 4,698,700' 4,845,700' 4,997,700 227' (619,300)' (673,300)' (778,300) Impact of Options: Table C Items 1 through 9 Table C Item 10 (next 3 items taken together) Supplement from Savings E Book cost difference compared to Hardback Books Equipment and Facility Updates to keep FPL inviting & energy efficient 207,000 207,000 207,000 (158,000) (158,000) (158,000) 175,000 128,000 129,000 315,700 362,700 361,700 Revised Annual Revenue Needs 227 (79,600) (133,600) (238,600) Long Term Revenue Committee Report ATTACHMENT 1 2013 2014 2015 Fayetteville Public Library Budget Reductions 2013-2015 Budget Budget Budget Added Revenue to Balance Annual Budget FINRA Grant Revenue 28,835 Recognize Wal-Mart/Sam's Grant for Brainfuze Database 9,000 Obtain Board approval to use FPL endowment managed by Foundation 35,000 Add NEH Funding 36,000 Internal Transfers from Designated Savings Accounts 79,500 Added Resources ' 188,335 Expenditure Reductions to Balance Annual. Budget Reduce Program Supplies/Performances 19,675 60,156 19,766 Reduce Library Materials 0 0 84,500 Reduce Marketing & Community Relations 6,750 16,227 18,369 Increase Salary Contingency (8,000) Reduce Salary Contingency 62,000 Reduce PTO Buy -Back 10,000 Reduce Administration - Personnel Services 28,000 Reduce Facilities - Personnel Services 12,317 22,065 Reduce Administration Supplies 5,700 Reduce Marketing Supplies 560 Reduce Computer Software - Application 17,000 Reduce Public Notification 2,250 Reduce Postage 6,000 Reduce Electricity 3,000 Reduce Municipal Water 600 Reduce Contract Services 25,800 19,220 Reduce Dropbox Pickup 2,500 Reduce Other Professional Services 8,000 Reduce Memberships 768 Reduce Travel, Lodging & Meals 22,325 Reduce Training & Professional Develop 22,675 Reduce Bank Service Charges 300 Reduce Building Maintenance 36,450 99,500 Reduce Furniture & Equipment 35,000 Reduce Building Improvements 24,500 Reduce Computer & Technological Equipment 10,440 Total Reductions for Operational Expenses 18,425 313,128 362,860 Reduction for Master Plan Phase 2 140,000 Total Expenditure Budget Reductions to Balance Budget on an Annual Basi; 18,425 313,128 502,860 Long Term Revenue Committee Report ADDENDUM Designated Reserves FPL has four (4) designated reserves: Long Term, Facilities, Technology, and Furniture & Equipment. The following is a recap of the original source used to establish each of the designated reserves along with a discussion of the original purpose for each. These reserves are controlled by FPL Board of Trustees and are completely separate from the endowments managed by the Foundation. Please note: these designated reserves are scheduled to be fully utilized by 2020. Long Term A review of the financial records reveals that the Long Term Reserve was established in 2003 with an initial deposit of $99,780. The next significant deposit, $992,425, was in October 2004 from the sale of the Fulbright Library Building on Dickson Street. The funds were used to pay for remaining cost associated with completion and furnishing of Blair Library. The table below lists the major actions taken with regard to the Long Term Reserve. Date Description Transfer In (Out) Amount 7/31/2003 Initial Deposit 99,780 10/31/2004 Sale of Fulbright building 992,425 8/5/2005 Transfer for Building Payments (457,726) 6/22/2006 Deposit 50,000 12/14/2006 Transfer from Merrill Lynch Accounts 600,000 9/5/2007 Establish Facilities Restricted Investment (206,129) 9/5/2007 Establish Furniture & Equipment Restricted Investment (206,129) 9/5/2007 Establish Technology Restricted Investment (206,129 4/11/2011 Transfer from Merrill Lynch Accounts 780,000 11/28/2011 Transfer To Arvest for Operations (100,000) 6/2015 Transfer to Operating Investment (79,000) 10/2015 Transfer to Operating investment (79,000) The balance in the Long Term Reserve Restricted investment as of April 30, 2015 is approximately $1,172,000. Facilities The Facilities Restricted investment was established in September 2007 with an initial deposit of $206,129 from Long Term Reserve and has been funded with unexpended operational budget money from Facility budget line items. This transfer was not made for 2013 and 2014 in order to allow the remaining budgeted money to flow back into Operational Reserves. Investment earnings on Facilities Reserve are added to the balance on a monthly basis. There was a transfer to Operating Investment of $16,500 in February 2014 to reimburse for some facility improvements paid from Operating Investments. The balance in the Facilities Restricted investment as of April 30, 2015 is approximately $535,000. Technology The Technology Restricted investment was established in September 2007 with an initial deposit from Long Term Reserve in the amount of $206,129 and has been funded with unexpended operational budget money from IT budget line items. This transfer was not made for 2013 and 2014 in order to allow the remaining budgeted money to flow back into Operational Reserves. Long Term Revenue Committee Report Investment earnings are added to the balance on a monthly basis. There was a transfer from Technology Reserves of $13,000 in February 2014 to Operating Investments to reimburse for some technology improvements paid from Operating Investments. The balance in the Technology Restricted investment as of April 30, 2015 is approximately $270,000. Furniture & Equipment The Furniture & Equipment Restricted investment was established in September 2007 with an initial deposit from Long Term Reserve of $206,129. The balance in the Furniture & Equipment Restricted investment as of April 30, 2015 is approximately $189,000. Investment earnings are added to the balance on a monthly basis. There was a transfer from Furniture & Equipment Reserves of $50,000 in February 2014 to Operating Investments to reimburse for some furniture & equipment improvements paid from Operating Investments. Fayetteville Public Library Long Term Revenue Committee - Organizational Meeting January 13, 2015 4 pm Minutes Prepared by S. Daniel, Office Manager �Ptesent: J. Parry, M. Rice, G. Faucette, and J. Butt Absent: K. Agee Staff present: D. Johnson, S. Foley, S. Daniel, and S. Davis Press: Dan Holtmeyer D. Johnson opened the meeting. Expenditures have been outpacing revenues for a number of years. Budget reductions for 2015 were difficult as the goal was to protect the public from feeling any cuts. The Board of Trustees assigned this committee to propose options for long-term solutions. March 4th is the target date for recommendations. Revenue and support consist primarily of state aid, program fees, grants and overdue fines. State aid to public libraries is formula based. Over dues, while appearing reduced in 2015, actually reflect assigning fees for damaged books to its own line item. Staff will research fee levels at peer libraries. Cafe rental has remained steady; the lease is now year-to- year. It may be possible to adjust the lease to pay FPL a percentage of sales over a pre -determined level. Designated funds are those for computers, furniture, and maintenance. Transfers come from the city, the 1 mill property tax designated for the library, and city funding specifically for books and IT equipment. Both the Foundation and the Friends organizations transfer money to FPL annually. However, a portion of the Foundation's transfer has been suspended for 7 years to replenish coffers depleted in anticipation of purchasing city hospital. That transfer has been replaced by drawing down the library's long term investment fund. Expenditures for all library materials have decreased about 15% from $487,500 in 2013 to $428,000 in 2015. Print books are under funded by $77,500 — a need identified in the library's master plan. Also underfunded is the eBooks consortium. Beginning this year, FPL will pay dues only to remain a member of the consortium. Any additional funds will purchase eBooks for Fayetteville cardholders only. In the past, all benefits were accounted for under administration; now they are spread among departments. Adult and Reference: On-line databases, formerly in IT, were moved to Adult and Reference Services because those staff members select and purchase the databases. Adult and Reference also shows an increase for the FPL author series because the library has taken on this expense. The NEH grant contributes to this expense. Circulation: Materials and supplies went from $5000 to $10,630 due to promotional material sold at the check-out desk. Tech Services: The majority of the increase in this department is due to benefits being reassigned. The increase in personnel is due to the loss of an admin position and the promotion of an assistant manager. Youth and Outreach: True Lit is the main additional cost for this department. PTO buyback: Auditors cautioned the library that vacation balances were too high creating a huge liability. In response, the board amended library policy allowing staff to cash in PTO over a 2 year period to bring down their balances. The policy was further amended to establish a maximum accrual of 320 hours per year - use it or lose it. Administration: The $140,000 in "amounts not funded" is for the second phase of the master plan if FPL purchases the city hospital property. Development and Marketing: Not funded is $8008 as we move from paper to more intensive on line marketing efforts. Facilities: Not funded is $22,065 for an additional contract maintenance worker. The $99,500 is not unfunded; it represents a true cut in the maintenance budget. IT: Cataloguing software expense went to Tech Services. Total IT maintenance went from $65,430 to $117,360 due to internal functionality. (A direct quote from Pickle; I have no idea what it means©) Net revenue: Has been running negative for 5 years; this year shows a $227 surplus. Discussion of 5"' member on committee: Committee decided to ask both Blake Woolsey and Dan Ferritor to join. David Johnson will call both. Jack Butt left the meeting at 5:17. The next meeting will be Tuesday, January 27 at 3 pm at which time the committee will elect a chair. Discussion to focus on projections for the future. Stephen Davis will meet individually with new members to bring them up to speed on the 2015 budget. Long Term Revenue Committee Minutes Jan. 27, 2015 Prepared by Susan Foley Members present: Janine Perry, Maylon Rice, Jack Butt, George Faucette and Dan Ferritor. Staff present: David Johnson, Stephen Davis and Susan Foley. Dan Holtmeyer with the Arkansas Democrat Gazette was also present. David welcomed the committee and convened the meeting at 3:05 in the Fayetteville Public Library (FPL) Staff training room. He welcomed Dan Ferritor, former FPL Board of Trustee, as the newest member. David shared the staff research on fee comparison with benchmark libraries: Bentonville, Central Arkansas Library System (CALS), Champaign, IL, Bloomington, IL, Iowa City and Ames, IA and Boulder, CO. Dan asked how often the staff reviews fines and fees. David reported typically every 2 years, but the staff had a raging debate at the last manager's meeting over equipment fees and whether to ask patrons for a credit card in order to circulate the items. It was stated that patrons must be in good standing to be able to cheek -out materials or equipment. Stephen says receivables of $325,000 are currently outstanding from patrons. David states if patrons will bring the materials back, he will waive the late fee. Maylon mentioned Siloam Springs library recently had an uproar over whether to have a collection agency get involved for receivables. Stephen says receivables per year are around $75,000 and our Library value calculation of all library materials is $17 million, making receivables less than .5% of the library's total value. The table below provides current receivables detail that was not available for the meeting: Material Dollar Value Number of Items Blu-ray 2,678.82 112 Books 31,595.50 1,777 Book on CD 1,409.85 27 Book on Tape 35.97 3 Children's Kits 539.94 11 DVD 19,791.31 1,140 DVD Player 578.97 3 Game CD 25 1 Laptop 3,668.99 6 Magazines 85 17 Music CD 2,828.86 201 Playaway 139.98 2 Puzzle 76.99 5 RNR Blu-Ray 674.00 32 RNR DVD 6,835.52 372 Serial 33.95 1 Total 70,998.65 3,710 David mentioned that an overdue fee of $5 will forbid the patron from any further check-out. Stephen reported that we employ several techniques to retrieve fines and materials from a collection agency to the City Prosecuting Atty. Jack thinks we may need to lose less and charge more to shrink the gap. He thinks we should consider raising fees because we are not charging patrons for using the library, only for abusing the library. Maylon commented that the library could charge $5 for borrowing privileges per patron. David says the library has 77,000 patrons. Stephen stated that Circulation staff ran numbers to see what FPL would gain if we raised rates and he will distribute to the committee at the next meeting. Maylon discussed the room rental fee and David mentioned that will start Feb. 1, we will begin checking out the meeting room use. Dan wants the librarians to make sure that fees match our market, not benchmarks. George thinks the benchmarks matter since the committee is charged with defining the future for potential income. Maylon reminded the group that that they are to look under each rock in these early meetings so nothing is not under consideration. Janine asked to hear more about the gap to understand the issue for the past 5 years. Stephen says we reduced the budget by $502,000 and they were not necessarily cuts, but reduction in resources. Maintenance was reduced by $99,000, book purchases reduced by $77,000 and $23,000 in contract services. How big is the gap, Janine asks? Stephen says we have had the same staff numbers for 10 years, the building is showing wear and tear and materials took a big hit in the 2015 budget. If we want to maintain 2014 standards, we would need another $316,000 (with inflation factored in). Janine says that helps her understand where the gaps are located now that Stephen explained the spreadsheet. She suggests that we need to get the library to the 2015 level on successive years. George asked when fees were last raised and David reported it was Last changed in 2010. Dan remembers the change was to be more punitive, rather than raising more income. The City has given FPL its spending projections through 2019. Maylon reported on 2 millage elections in the state last year - one passed and one failed. Local charitable foundations have changed their focus for funding so that FPL does not qualify any longer. Janine asked if our goal is to only raise $316,000, then we may only want to raise DVD fines only. Stephen mentioned that any money not spent at previous yearends have been transferred to savings, but have not had those extra monies in the last 2 years. Dan says it would be very hard to "sell" a millage to the public without showing the community what bang they get for their buck and not shoring up the budget both. George agrees and they both thought our fees needed work, for the good of the community. Maylon says it's tough to talk about a millage to the public, but if it's necessary, we need to talk about it. David mentioned Arsaga's rent is only a month to month basis since their lease expired more than three years ago. Janine asks if the committee could see fee increase projections prepared by staff so the committee can see a full basket of options. Stephen says he can work on that for the next committee meeting. Maylon mentioned North Little Rock Public Library's problems - not enough $ in their budget, a new mayor, etc. George thinks we should look at a reduction in library's operating 64 hours/week to realize greater savings. Stephen says the library could close on Sunday's since the building has to be closed at least in a 4 hour block for any significant utility savings. Dan says we have to look at a more holistic approach for both reductions and increases. Stephen reports we will put together a spreadsheet to close the gap. It may be a painful conversation in public though, but Dan thinks it is a good conversation to have. Jack asks is there a simple summary why the library has stripped its usefulness (spending outstripped revenue) of the budget? Maylon says our circulation, our materials, our patrons' numbers have all increased. David says property tax - our 1 mil is not growing and city transfer is not keeping pace with inflation. George says the public needs to be made aware. Maylon thinks they city may eventually stop transferring monies if another mayor is elected and he thinks we need to get ahead of that decision. Stephen says property assessments went down in 2008 and 2009 and that effected millage the library receives. George says they assess every 3 years on all property and Fayetteville has had less new commercial growth than other NWA cities. Jack says one alternative is that the city could raise property millage or sales tax — both would require a citywide vote. They could decide to give the library a larger city millage and Stephen says the cap is 5 mils. There is no sunset on library millage. David asks should we distance the library or closer align the library to the City of Fayetteville Administration? The last millage campaign failed, but Dan says the previous mayor turned off voters and we lost by a very small margin. The library got tied into millage savings going to police and fire which confused the voters. Janine called for a re -cap. Our cardholders are around 77,000 and twice the use of materials. Use is up and all other income is flat, counting inflation. City Ops transfer is flat. Fees and other misc. fees are declining or flat. We have been hanging on and can't keep operating at this level. Dan says that's the definition; we are overspending. Material added after meeting: Millage for the City of Fayetteville and Fayetteville School District are applied to properties in different boundaries: i. e. The Mall area is in the city boundary but not in the Fayetteville School District boundary. FPL can have up -to 5 mils for operations plus up -to 3 mils for capital. These library mils require voter approval. FPL currently uses 1 mil for operations so we have the potential for an additional 4 mils for operations plus 3 mils for capital. The City of Fayetteville has 5 discretionary mils that can be levied on an annual basis by the City Council. The City of Fayetteville is levying 1.3 mils for 2015. Jack stated it seems like a simple concept. We either cut programs and/or hours or raise revenue. George says we need to present this to the community. Some of this will make a zero sum gain. David says this is the harsh reality. Dan hates to see the building take the hit on the budget reductions because this building is the community's investment and 'a deep hole to climb out of once you have made that decision to cut the facilities' budget. The Jones Center endowment was discussed since their endowment's fund kept going down and the Trust could not take care of needs without reducing staff and charging fees. Stephen agreed to the following homework: 1. What would it take to close the gap if we raised fees and reduced programs? Maylon suggests we look at age brackets. 2. Jack asks if we can figure a "return on investment" (ROI) for programs to see which ones are most effective? 3. George wants to see how much payroll and utility costs have been in the last 10 years. Stephen says we conducted a 2013 salary survey and it amounted to a 4% increase 4-5 below and 2-3 above. Stephen says mandatory minimum wage of $8.50 rate will impact us and we have 68 staff, only 10 below the min. David asks that the group elect a chairperson. George made a motion for Janine to take on that job. Jack seconded the motion. The vote was unanimous. The next meetings will be on the following dates, all in the staff training room: Tues., February 10, 2-3pm Tues., February 24, 3-4:30pm The next meetings will be March 10, March 24th and March 31 will be from 3-4:30. George will be gone on March 10 meeting. Maylon asked that David invite the Mayor to the next meeting. Stephen says he will invite the new assessor also. Judge Beaumont's hearing on the City Hospital property is March 4 and now involves the library. David asked the committee to add that date to their calendar. The meeting concluded at 4:45pm. Fayetteville Public Library Long Term Revenue Committee - Organizational Meeting February 10, 2015 2 pm Minutes Prepared by S. Daniel, Office Manager Present: J. Parry, M. Rice, G. Faucette, J. Butt, and D. Ferritor. K. Agee, not a committee member, also present for a brief period at the beginning of the meeting. Staff present: D. Johnson, S. Foley, S. Daniel, and S. Davis Press: Dan Holtmeyer I. Call to order: J. Parry called the meeting to order at 2:00 pm. II. Approval of minutes: M. Rice moved to approve minutes of January 13, 2015 and January 27, 2015. G. Faucette seconded. All voted aye. III. Results of staff research a. D. Johnson defined "library services" to include those identified by the Public Library Data Service (PLDS) as well as programs, program attendance, computer sessions, electronics resource use, and database use. Cardholders are purged after 3 years of inactivity. HOMEWORK: How many of the 74,000 card holders actually make a transaction in any given year? A mean population of 96,260 typically circs 864,498 items. Fayetteville with a pop of 80,697 circulated 1,271,021 items. Fayetteville's circs per capita are 15.8; the national mean is 9.0, HOMEWORK: How many cards are sold to nonresidents? b. Programming supplies and services history: FPL started tracking these in 2006. The spreadsheet breaks out supplies and services, and subtracts restricted grants and endowment funding resulting in net spending from general revenues. Programming expenses are 10 times as high as 2006; net from library general revenues has increased about 5 times. The FINRA grant ends in February, 2015. In 2014, FPL hosted 1772 programs, which works out to $48/program. Bottom line: FPL paid $95,242 to get $222,335 worth of programming. Part of the increase is that FPL took on the cost of the distinguished author series, a program formerly financed by the Foundation. c. 10 year history of staff and hours paid: The number of staff reported for unemployment tax purposes has remained relatively constant since 2006. FTEs grew from 41.29 in 2006 to 48.48 in 2014. However, in response to auditors' concerns that PTO banks had gotten too high, FPL bought back PTO hours in 2013 and 2014 which makes the FTE numbers for those years artificially high. About 58% of FPL's budget goes to personnel, which is relatively low for a nonprofit. The UA spends about 72% of its budget on personnel costs. HOMEWORK: For our benchmark libraries, what % of their budgets go to personnel? Want to be able to compare FPL to our cohorts. As we go forward, the minimum wage increase will kick in, and will increase what we pay employees at the lower end of the wage scale. FPL staff have had very small raises over time - only cost of living and, in some cases, no raise at all. d. PLDS Survey: FPL serves more people than our benchmarks and peers on almost every metric. e. Benchmark libraries fee structure: Staff researched setting all our fees to the highest rate charged by benchmarks and peers to determine the revenue change. Renting meeting rooms has the potential to be a significant revenue generator, but it may reduce the use of the rooms. HOMEWORK: What revenue would result if we charged for each resident library card? This would be the biggest money raiser compared to other options considered. A user fee of this nature is regressive. And, we may not be able to charge a millage and then turn around and charge for the service. HOMEWORK: Determine if there is an AG opinion on this. Users' fees are an easier sell politically than a tax increase, but need to consider cost of administering the fee as well as the social cost. Would customer irritation lead to fewer cardholders? f. Billed status for 2014: $70,998.65 is the value of 3710 items in billed status. Blu-rays, DVDs, RNR -DVDs and RNR Blu-rays account for about half of all items in billed status. In 5 years, CDs and DVDs may give way to streaming. Right now, we allow up to 50 CDs and DVDs to be checked out; might want to drop this limit. g. Cost of major events: Dave Barry size events cost about $16,000 in facilities and human resources. Gala -size events cost about $71,000. For both sizes you have to close at least part of the library which is a forgone opportunity cost. On the other hand, new people come to the events that wouldn't otherwise. As well, the events bring good will and good marketing. If you add the cost of the honorarium we pay speakers, the costs for both events are approximately 1/3 soft cost (personnel) and 2/3 hard cost (AV and facility costs). A Levon Helm event costs a lot per person, but there is a large benefit. HOMEWORK: Find the cost per person for this size event. h. Library millage for AR communities: The column labeled "lib tax units" is the millage. In some cases, the millage covers a number of counties. So, for example, Southeast AR Regional Library gets 5 mills, one for each of the 5 counties. For the next meeting, all members agreed to have read the research and be ready to discuss. HOMEWORK: Invite the Mayor, or a representative of the Mayor's office to attend. HOMEWORK: What about cutting hours? How about charging for parking? HOMEWORK: Send every committee member a copy of the Democrat Gazette editorial by John Wells. J. Parry declared the meeting adjourned at 3:07 pm. Fayetteville Public Library Long Term Revenue Committee February 24, 2015 3 pm Minutes Prepared by S. Daniel, Office Manager Present: J. Parry, M. Rice, G. Faucette, J. Butt, and D. Ferritor. Staff present: D. Johnson, S. Foley, S. Daniel, and S. Davis Press: Dan Holtmeyer I. Call to order: J. Parry called the meeting to order at 3:00 pm. II. Approval of minutes: M. Rice moved to approve minutes of February 10, 2015. D. Ferritor seconded. All voted aye. III. Results of staff research a. Patron Library Card Usage by Year: The graphs provided do not include "in -library" or eBooks. While visitors to the library are tracked quite accurately, the number of card holders may not be an accurate indicator of actual library use. b. AG opinion: None exist on the topic of charging for library cards. c. Cost of events per person: Depending on the number attending the event and the speaker fee, the cost per attendee ranges from approximately $37 to $106. See page 9 of packet for details. d. Closing the library for one or two days (Sunday and/or Monday): Closing Sundays would have the most impact on programming — most of which is free. Sundays are also busier than Mondays. It may not be possible to turn off the HVAC system when closed because there are humidity standards for maintaining the collection. Staff estimated the savings at $6000/$12,000 for closing one/two days; Library Associate and Page positions would be primarily affected. Facilities staff would use the closed day(s) to catch up on maintenance that can't be done during open hours. For significant cost savings, cuts to salaried employees would be necessary. FPL employs about 30 full-time staff; another 15 are 30 hour employees. Rough calculations: Closing 5 hours on Sunday x 52 weeks x 10 employees x $20/hour= $52,000 savings/year Closing 11 hours on Monday x 52 weeks x 25 employees x $20/hour = $286,000 savings/year Eliminate programming (2014 expense was $56,000) Need to demonstrate good stewardship to the public if a millage increase is to be requested. The current funding short -fall originated from failure to ask for an operating millage when Blair Library was built. The temporary sales tax that funded construction of Blair Library was only for bricks and mortar. An increased operating millage request in 2006 failed by a few hundred votes. The real-estate crash exacerbated the problem as the property tax millage failed to keep pace with library expenses. In addition, the city transfer has remained flat since 2005. FPL was forced to choose between reducing staff and/or programs or spending out of reserves. It is preferable to give citizens a choice. FPL could present 2 budgets to the public, one factoring in a millage increase, the other without an increase but with cuts in open hours and programming. Citizens generally prefer voting for something they may gain rather than voting to avoid losing something. One mill raises $1.3 million, and only a millage would be a long-term solution. Closing for a day or days only solves the problem short-term. Deferred maintenance, a savings account for when equipment fails, is a significant component of the cost to operate the library as it ages. For example, FPL needs to bank $40,000-$50,000 per year just to replace the network core, which has a maximum 10 year life expectancy. A new elevator costs about $100,000; those in the library are expected to last another 5 years. If deferred maintenance were not becoming critical, the operating reserve (currently about $2 million) could sustain expenses for a number of years, especially if property values begin to go back up. However, anticipated maintenance requires an additional $550,000 be budgeted per year. In summary, the millage rate has been set at 1 since the 1950s, the city transfer has been the same for 10 years, and the library has been on an upward use trajectory. Because of good stewardship, FPL has provided services and programming to more people while revenue has remained flat. Using conservative property tax projections (2.5% annually), it is not possible to continue the current level of operations and maintain the building without taking significant steps. It is important to take this issue to the public - perhaps an open forum or something more structured (a facilitated conversation). This committee is charged with reporting back to the board of trustees with a recommendation for going forward. HOMEWORK: Develop a breakdown of the reserves and a schedule of what is allotted/required for deferred maintenance because it is a major reason for the rapidly growing gap between expenses and revenues. HOMEWORK: Pair the options below with their associated cost savings and/or increased revenue. Options: Close on Sundays and/or Mondays Millage increase Reduce/eliminate programs Charge for library cards (card holders may drop from 70,000 to 30,000 but still raise $150,000 at $5/each) Charge for meeting room use Do not replace departing employees Furlough employees Increase fines and fees Charge for room rentals Reduce the collection Reduce the number of DVDs that can be checked out (to decrease losses) Increase Arsaga's rent Charge for events Eliminate special events and author events D. Ferritor moved to adjourn; M. Rice seconded. All voted AYE. J. Parry declared the meeting adjourned at 4:36 pm. Next meeting is March 10 at 3 pm. Fayetteville Public Library Long Term Revenue Committee March 10, 2015 3 pm Minutes Prepared by S. Daniel, Office Manager Present: J. Parry, M. Rice, J. Butt, and D. Ferritor Absent: G. Faucette Staff present: D. Johnson, S. Foley, S. Daniel, S. Davis, B. Holt, and S. Palmer Press: Dan Holtmeyer Others: C. Hendrix -Kral, P. Becker I. Call to order: J. Parry called the meeting to order at 3:00 pm. II. Approval of minutes: M. Rice moved to approve minutes of February 24, 2015. D. Ferritor seconded. All voted aye. III. Results of staff research a. Reduced lawn care: This service, about $17,000 annually, is currently contracted. Reducing the budget by $10,000 would return maintenance to 2011-12 levels when the grounds were sparsely planted and poorly maintained. How would this reduction affect named gardens? b. Close on Sundays and/or Mondays: Assumes cutting 8 hours from full-time staff making more than $55,000. Twenty and thirty hour employees could keep their hours; they would not be paid for holiday Mondays. Because labor is the biggest expense, it has the most potential for saving. C. Do not replace departing employees: This option would have the effect of reducing programming over time. Because there is no control over which employees would depart, the exact impact on programming is unpredictable. A temporary hiring freeze with careful monitoring by the board and executive director may be considered. d. Reduce the collection: This year's collection budget has been reduced by $70,000. A further 15% reduction next year was suggested. EBooks, more expensive than paper books, are in highest demand which further stretches the collection budget. DVDs have the highest circulation. Reducing the DVD check-out limit from 50 (to reduce losses) would make the collection available to more patrons but may have the effect of reducing revenue from late fees e. Eliminate Targe special events: It's not clear whether these events attract regular patrons or others who don't typically use the library. Special events may be a long-term investment if they attract donors and potential donors. However, it may be necessary to charge for the receptions that typically accompany these events and/or find an underwriter. The NEH distribution, scheduled to be $58,000 this year, could be split between programming and the collection. f. Reduce/eliminate programs: If the summer reading kick-off was eliminated, would fewer children participate? It may be preferable to eliminate or charge for Targe events than cut regular programming. There may be ways to cut costs. For example, FPL might be a venue for the Roots Festival but not provide funding. g. Millage: A millage may be necessary but it is important to show voters FPL has cut costs and spent responsibly. It is assumed the city transfer would continue. h. The Master Plan identified library needs as Fayetteville grows to 125,000 by the year 2023. These include an additional 80,000 square feet, a larger collection, 164 computer stations, smart classrooms, increased seating, and more meeting space and quiet study rooms. One possible timeline: 1. Spring/summer 2015: conduct polls/surveys about what public wants 2. Fall 2015: millage election 3. Winter 2016: raise $15 million in private donations 4. Fall 2019: expansion millage for 56,000 square feet 5. Fall 2025: Build branch with 24,000 square feet (for a total of 80,000 additional square feet identified in the Master Plan) CIP: FPL is currently deferring maintenance. The carpet in the Walker room is not being replaced; the cork flooring is not being refinished. It is necessary to bank $400,000-$500,000 annually to maintain the structure. Maintaining the building in opening day condition is the top priority. IV. Adjournment: The next meeting will be Tuesday, March 24 at 3 pm when members will be asked to narrow the options presented. M. Rice moved to adjourn; J. Butt seconded. All voted AVE. The meeting adjourned at 4:30 pm. Fayetteville Public Library Long Term Revenue Committee March 31, 2015 3 pm Minutes Prepared by S. Daniel, Office Manager Present: J. Parry, M. Rice, J. Butt, G. Faucette and D. Ferritor Staff present: D. Johnson, S. Daniel, B. Holt Press: Dan Holtmeyer Citizens: Lorraine O'Neal City staff: P. Becker I. Call to order: J. Parry called the meeting to order at 3:05 pm. II. Approval of minutes: D. Ferritor moved to approve minutes of March 10, 2015. M. Rice seconded. All voted aye. III. New Developments a. The Stone Family has appealed Judge Beaumont's ruling to quiet the title to the City Hospital property. It may take 6-18 months to receive an appellate court decision. b. An Arkansas legislative committee is proposing a revenue stabilization act that cuts $1 million from the state library's budget. This will mean a reduction in the $143,000 FPL receives annually. Depending on how the cut is distributed (equal vs unequal % reduction, FPL could lose from $24,000 to $90,000). The State Librarian, Carolyn Ashcraft, considers this act to be a done deal. She has been told to remove the $1 million from her budget. The best hope is to get the money restored next year. The original budget was $5.7 million; the cut being proposed is 18% to take effect in July. IV. Discussion of options Staff are asked to take the whittled down list of options from this meeting to create a spreadsheet that identifies the cost saved or revenue generated. This spreadsheet will be provided to the committee by April 21". a. Recommend staff explore bidding out cafe operation. All equipment is owned by Arsaga's so a new company would have capital costs. b. Recommend staff explore charging for special events, like the distinguished author series using a 2 tiered approach — closed event for invited guests willing to pay and a public event that would be free. Preference for putting money into events that attract more people, and these big events bring in potential donors who, as a result, become more involved. The NEH grant provides some money for events. Recommend sponsorships be found for distinguished authors. Charging for large events, holding fewer such events, looking for models from other institutions, and finding sponsors will reduce the cost. c. With a $340,000 deficit projected for 2016 and increasing with the years, a millage must be explored. Two votes, one now for operations and another for the expansion, is an uphill climb. A millage vote may need to be part of a longer term plan that is based on demonstrating the library has done everything possible to cut costs and increase revenue. A fall millage vote is probably too soon. A millage passed in the fall would apply in 2016 and be collected in 2017. The goal is to address short term problems to get to the long term solution. One mil in Fayetteville doesn't generate as much revenue as a mil in Bentonville or Rogers, in part due to the presence of tax-exempt properties such as the UA. d. Recommend staff explore charging for library cards. Because FPL would lose its e -rate discount if it charged for cards, the recommendation is for 2 types of cards, one for borrowers that comes with a fee and another that would be free and allow computer use. Library research confirms when cards are not free, card holder numbers decline. Suggest scholarships for the neediest families, a family friendly fee structure, and no charge for cardholders under 18. Citizens already pay property taxes to support FPL; they shouldn't have to pay again for a card. No consensus yet. e. Increasing fines and fees: Agreement to limit DVD checkouts to prevent losses. Revenue from fines and fees is $116,000 yearly. Recommend asking staff to consider raising fines and fees and reviewing and adjusting annually. f. Knowing the city hospital purchase, should $2 million go back into investments? That would restore the Foundation transfer of $125,000 annually. The library had agreed to forego the transfer for 7 years. May not be the best time to go back into market as it is high right now. May take 12-15 months for Supreme Court to rule. The $2 million, if it had been in the market, would have made approximately $600,000. Becker noted FPL shouldn't even be talking about an expansion right now if the library budget is so shaky. General agreement to ask the foundation to reactivate the transfer. g. Charge for room rentals: Recommend charging more for the Walker Room, Board Room and Staff Training Room. Did not recommend charging for study rooms. Recommend staff develop a rental plan, 2 tiered, for large rooms. V. Summary of recommendations Suggestion Recommendation Close on Sundays and/or Not recommended Mondays Personnel Freeze Collection Reduction DVD Circulation Policy Author & Special events Deferred Maintenance City Property Funds * No new positions created for 3 years * Attrition related openings filled at Executive Director's discretion for 3 years * Wage freeze * Reduce participation in e -book consortium by ?? percent * Maintain 2015 $70,000 book budget cut for three years Reduce the number of DVDs a patron can check out at one time from 50 to 10. * Hold fewer special events * Create a two tiered system where the event is free but the reception is a paid, ticketed event. * Seek sponsorships to underwrite author events for not net cost to library. Reexamine deferred maintenance for potential reductions. Fund to be sacrosanct. Return $2 million dollars to the Foundation for investment and resume $120K transfer Reduce/eliminate programs Not recommended Coffee shop rental increase Submit RFP for coffee space Fines & Fees * Recommend adjustment to fines and fee schedule * Implement annual plan to review fines and fees schedule Meeting Room Rental Create a rental fee schedule for the Walker Room, Ann Henry Board Room, and Staff Training Room. Do not charge for study rooms Library Card Fee Explore a two tiered library card system: one card for borrowers that comes with a fee and another card that would be free and allow for computer use. Also investigate a "family" card. Reduce lawn care Not recommended Property Millage Define the millage increase required to operate for the next 8 years. A fall millage vote is too soon. Vote may need to be part of a longer term plan based on demonstrating FPL has done everything possible to cut costs and increase revenue The committee will next meet on April 28th at 3:30 pm in the staff training room. Prioritized recommendations will be presented to the board at a special meeting, date to be determined. Adjournment: D. Ferritor moved to adjourn; M. Rice seconded. All voted AYE. The meeting adjourned at 5:45 pm Fayetteville Public Library Long Term Revenue Committee April 28, 2015 3:30 pm Minutes Prepared by S. Daniel, Office Manager Present: J. Parry, M. Rice, J. Butt, and G. Faucette Absent: D. Ferritor (priorities and recommendations included below sent via email) Staff present: D. Johnson, S. Daniel, S. Davis, B. Holt, S. Foley, L. Yandell, S. Houk, S. Palmer, and S. Walker Press: Joel Walsh City staff: P. Becker I. Call to order: J. Parry called the meeting to order at 3:34 pm. II. Approval of minutes: M. Rice moved to approve the minutes of March 31, 2015. G. Faucette seconded. All voted AYE. III. M. Rice moved to approve the agenda; J. Butt seconded. All voted AYE. IV. Discussion of options a. An explosion in public use of FPL combined with a flat revenue stream have created a growing gap between revenues and expenses in the library's budget. Both short and long-term fixes are needed. Deficits predicted for 2016-2018 equal $2.1 million. A priority is proper maintenance of the facility. The Foundation's Unrestricted Capital Endowment of $1.6 million could cover maintenance costs for a few years. Given as part of the capital campaign for Blair Library, are these funds committed only to capital? Or can these be used for maintenance as well? The Library's long-term reserve of about $920,000± left over from sale of the Fulbright building is also an option. There is also some money ($498,000±) in the library's Facilities Reserve, the Technology Reserve ($270,000±) and Furniture & Equipment Replacement Reserve ($185,000±) Historically, there has been an annual transfer for operations from the Foundation to the Library. However, when the Foundation agreed to purchase the city hospital property, FPL agreed to forego this transfer for 7 years to partially restore the Foundation's endowment. Discussion ensued about the possibility of restoring the transfer and not making any attempt to restore the endowment. Any resumed transfer would be smaller since the endowment is smaller — assuming the land purchase is eventually finalized. If the corpus of the Unrestricted Capital Endowment is approximately $1.6 million (after the city hospital property purchase) resuming the transfer at its historical level, roughly $124,000, would invade the corpus. A transfer from the Unrestricted Capital Endowment would more appropriately be $56,000 on a $1.6 million corpus. Though FPL typically spends annually less than it budgets, P. Becker cautioned against factoring this into a budget as unforeseen things happen. He also suggested using the Foundation's $1.6 million only for deferred maintenance that involves capital expenses. This committee's job is to look at ways to cut expenses and enhance revenues and, only after, consider how the pots of money mentioned above should be spent. The committee could recommend to the full board that certain revenues be earmarked. J. Butt noted, it's not good practice to cut services or raise costs on this community's award- winning library when the institution is running efficiently. A millage is the only realistic long-term solution to the growing deficit, without damaging the quality of library services, all of which are deemed valuable to the community. If the public turns down a millage, only then is the time to start cutting services and raising fines as there would be no alternative. The library is well run and not wasteful; it is out of staff control that usage has gone up while revenue stayed steady or went down. Looking ahead to an expansion, it is unlikely two millage votes in the span of 4 years would pass. The reserve funds are buying FPL a little time. A savings of $99,000 for a hiring freeze was estimated by looking at turnover over for 3 years and determining the saving from not replacing those who left; the analysis did not consider pages. Since some of those who left employment are critical, it might be safer to estimate savings of $50,000. Discussion of possible policy change to require fines be paid off before additional check-outs are allowed. Currently, the patron only needs to get the level below $10. Meeting room rentals: The fee for using the Walker and Henry rooms is $10 with additional fees for AV use. It is possible a county -wide re -appraisal this summer will increase property values by 30%. This is probably exaggerated; a more likely increase would be 5% for residences and 10-15% for commercial properties. Nonetheless, this increase should be part of the mix of options being considered by the committee. V. Votes on the options a, Personnel freeze estimated to save $50,000 per year: All voted yes. Note: This is not a vote for a wage freeze. b. Collection reduction: G. Faucette, J. Butt, J. Parry, D. Ferritor: no; M. Rice yes c. DVD Circulation Policy: Reduce maximum DVD checkouts to 10: All voted yes d. Author & Special Events: Hold these only if self supporting from sponsors or attendance fees, reducing library cost on these to zero. This would reduce costs by approximately $10,000 per year. D. Ferritor and M. Rice maybe, J. Parry and J. Butt yes, G. Faucette no e. City Hospital Property funds: Revise arrangement between the Library and Foundation. The Library offered - and the Foundation accepted - a plan whereby the library would forego the Foundation's annual transfer of $128,000 to the library for 7 years in exchange for the Foundation providing the $2 million purchase price for the hospital property. Going forward, the Foundation would continue to make an annual transfer to the library from its unrestricted endowment fund according to the amount of capital in that fund and the investment and distribution policies of the Foundation. This would result in a reduced level of approximately $60,000 annually. All voted yes. f. Deferred maintenance: J. Butt reiterated the importance of aesthetics upkeep as the cumulative effect of not doing such maintenance is a building run down at the heels. It was clarified that ordinary and cosmetic maintenance such as repainting, carpet cleaning and repair were provided for as part of the annual budget, not a capital reserve fund. When speaking of deferred maintenance and the budget, this committee was contemplating major replacements and repairs, such as HVAC, conveyer, elevators, and parking deck cables. M. Rice suggested earmarking now and preserving all of the $920,000± left from the sale of the Fulbright building to fully fund the capital reserve fund at its current budgeted levels, which would fund 2015, 2016 and most of 2107, to the end that there would be no cut in the capital reserve fund. It was agreed the preservation of the structural integrity of the building was paramount and that budget item should not be cut to preserve programs in other places. All voted yes. g. Coffee shop rental increase: All neutral. May be good business policy to look at a 10 year old contract. Committee agreed potential changes be explored with caution. h. Fines and fees: increase from $0.20 to $0.25 and do an annual review: all voted yes to increase and suggested staff explore a no tolerance policy meaning patron must pay the whole fine to check out more books. The 5 cent increase in fines would generate approximately $19,000 per year in additional revenue. i. Meeting room rental: D. Ferritor neutral, rest yes. This would generate approximately $28,000 per year in additional fees. j. Library card fee: D. Ferritor willing to consider it, J. Butt yes, on a basis that allowed children to have cards without fee as part of a family membership, rest no. k. Increase in assessment: Committee accepted estimates for additional revenue of $39,618/yr. This is really not an action to be taken, but simply estimating the probable revenue growth from new building and increased appraised value of existing properties. I. Millage election: It was noted a millage ask depends on circumstances and timing. The committee is recommending an ask within 1-3 years. J. Parry, J. Butt, G. Faucette and M. Rice voted yes. D. Ferritor voted no with the comment, "now is not the time." m. CONCLUSION: The total net benefit to the library from the budget actions approved was estimated to be $207,000 per year, plus a net gain of $920,000± over the period 2015 to 2017 from the application of the sale proceeds from the old library to the capital reserve fund, for a total of $1,421,000 in funds to cover a projected shortfall of $1,782,000 in funds for 2015-2017. If none of these programs are implemented until next year, then our additional funds over the period 2015-2018 would be $1,421,000 to apply against a four year projected shortfall, 2015- 2018 of $2,560,000, short by over a million dollars — that is a daunting stretch, that is going to come crashing in during 2018, and the program cutting and patron charging is going to have to extend further and deeper than anything we have come up with yet, in order to get us through 2018. VI. Next steps: produce a 2 page recommendation for the board's consideration. VII. Adjournment: M. Rice moved to adjourn, G. Faucette seconded. Meeting adjourned at 5:22 pm.