Went to this afternoon’s Council committee meeting to see how Orange County’s Commissioners would respond to Chapel Hill’s demands to increase Library operational funding NOW rather than later.

A few general observations/comments before my notes.

First, an apology to my loyal readers. I have spent much more time accumulating content than presenting it.

For instance, I went on the recent Town sponsored walk through Northside, led by Empowerment’s Delores Bailey (whose mother lived along the route), to review various NCD (neighborhood conservation district) violations and missteps (which generated these Council concerns the following Monday). Took lots of pictures, made lots of notes, hope to turn it into a post “sometime soon”. Given the huge backlog of content, I’ll try to pick up the pace over the next month.

As far as the Library funding issue, it’s clear that Chapel Hill has been subsidizing access to the %41 of County residents who hold library cards for too long.

The portion of that expense, calculated simplistically as a straight ratio, totes up to almost $7 million over the last decade. Given that there is a huge gap between the level of service our community has demanded and paid for those last 10 years – at a yearly cost now of $3 million dollars – and the level of service offered county residents – funded to the tune of $1 million – one could argue – as Orange County’s Manager Frank Clifton did – that the putative subsidy’s scope is distorted by Chapel Hill’s historical level of extraordinary support. While I agree with Council member Gene Pease, that the whole of the county deserves to have a library system more akin to that of Chapel Hill’s, I also agree with Frank’s analysis – comparing Chapel Hill’s caviar diet to the more modest appetite of County residents is an apples to oranges comparison.

As I’ve noted before (Library or Lot #5?), even though Chapel Hill has been unfairly subsidizing service for years, the demand for more operational funds NOW is being driven by the majority of this Council’s stated desire to imprudently issue $20.1M worth of bonds in June rather than addressing a fundamentally inequitable situation.

Given that the Council will not shed the ridiculous Lot #5/West 140 financial liability in order to deal more effectively with the fiscal strain a Library expansion will place on the budget, their demand to the Board of Commissioners, especially given the deep hole ($6M+) Orange County finds itself in, rings hollow.

Why the emphasis on increasing operational funds then?

To make the case for doing the expansion now irrespective of foreseeable economic conditions arguing otherwise.

Yes, when the new Library goes online we’ll the subsidy will swell and put residents even deeper in the hole, starting, conservatively estimated, at $30/year per “typical” homeowner. That’s nothing compared to the bond payments – starting around $2.3M/year – required to service that new debt load. And as Council member’s Laurin Easthom (who has ‘blogged on this issue) and Matt Czajkowski recently effectively argued, the true cost of that new debt extends well beyond those payments, including freezing the Town’s ability to borrow to meet more critical needs at least through 2014 (unless we have a steep tax increase!).

Reminder: Chapel Hill decided many year’s ago to fund the construction, expansion, provisioning and staffing of an independent Library to meet the needs of this community – unlike most other NC jurisdictions. Like the schools, the difference between funding one facility at $3M per annum vs. the $1M the County allocates for its entire library services ($250k which goes to subsidize Chapel Hill) has created a stark contrast between levels of service.

Today’s meeting, though, didn’t touch on the capital costs but rather on righting the historical Library funding inequity.

Rather than wait with a hope of producing a more polished piece, I present my notes in a raw, live ‘blog format (with a few asides thrown in ;-) ) in an effort to document a critical stage in this year’s budget negotiations.

The meeting was held at 5:15pm, April 29th, Chapel Hill Town Hall. In attendance were County Commissioners Barry Jacobs and Mike Nelson, Council members Sally Greene and Gene Pease, County Manager Frank Clifton, Town Manager Roger Stancil and Assistant Town Manager Bruce Heflin, News Observer reporter Jesse DeConto and CitizenWill.

Council member Sally Greene started out – “here’s our simple agenda” – Where are we going to find funding for the Library?

Sally – Council already had a robust discussion on Library – the sub-committee was instructed to focus on library funding equity – supposed to bring back a working agreement on funding soon -in 3 WEEKS (CitizenWill[cw] wonder if this is when they will push forward the bond funding?).

Sally – “we know there’s an inequity” – general agreement by both parties – how best to deal with it?

Commissioner Barry Jacobs – consistent level of services is desire – resolution referenced ([cw] turns out it was a motion made 3/19/2010 here pg. 27/28 – I happened to be there that evening ;-)).

Barry – intention to raise funding to state median not just for Chapel Hill but everywhere else – better integration between systems – define a unit of library service per county resident and make sure adequate services for all o.c. residents – open new facilities in north and south – referenced Cedar Grove and Carrboro Cybary

Barry then had to reference his Indy election questionnaire to find the broad outline sketched by the BOCC ([cw] as I noted above) – he said one condition included membership by county on Chapel Hill Library board

Sally notes that the County already has one ([cw] my old Tech Board colleague and all around great person Evelyn Daniels) – Barry corrected himself noting that subsequently the BOCC realized they had a representative but maybe the problem was that not all board members – in general – report back to the BOCC… that this was a common problem ([cw] this was one of the arguments recently made on behalf of shrinking the 70+ County advisory boards down to a more manageable number).

Commissioner Mike Nelson – 1st the %48 of the County’s current library service budget that the BOCC suggested be allocated would increase the $250K subsidy to $500,000 over the next 4 years with a phased in approach….

Council member Gene Pease – the crux of the problem is “What’s fair” – points out that %48 number is based on operating budget for all library services – no predictability as the County could turn up or down the budgetary faucet based on the prevalent conditions

Gene – “the county has a poor record” when it comes to funding the libraries – he presents the 2 formulas Council has batted around – basing funding on either a per capita or tax revenue generation model – minimum subsidy is $700K up to $1.1M using conservative estimates – which still doesn’t meet the fiscal obligation – %41 county usage has been pretty consistent over the last 10 years

Gene – County approach “not factoring in the contribution Chapel Hill” makes to the County in terms “of what the county gives back” ([cw] in other words reflecting the % taxes the town pays on an assessed value basis and getting an equivalent amount of support back)

Barry – if the %40 number decreases because other facilities are built/developed reducing demand then any proposed funding formula must accommodate that reality

Barry – why not create new library at Orange County Skills Development Building? [MAP] which could service both Carrboro and Chapel Hill ([cw] located in West End Franklin St. Downtown Chapel Hill) – 11K sq/ft – could move McDougle Middle School collection immediately – could staff immediately with 2 staff 36hr/26hr

Barry – wants to make sure that the formula reflects reductions in usage over time…. ([cw] HOW DO YOU CALCULATE GIVEN THAT FOLKS HOLD THEIR CARDS FOR SOME TIME? USAGE RATES HARD TO TEASE OUT ESPECIALLY FOR FOLKS WHO DON’T CHECKOUT MATERIALS BUT USE IN-FACILITY SERVICES?)

Gene – “We agree…makes sense”, Sally – that would be “fine if it reflects actual usage…”

Mike – “I feel sandbagged” – thought the meeting was to deal with funding inequity – just heard about this idea of moving McDougle an hour before – might be nice to speculate on but it adds complication to already difficult matter of funding existing Chapel Hill Library adequately

Barry – re-emphasizes his discussion reflects the necessity for having a formula that takes in to account the reduction of service – moving McDougle is an example of how the dynamic of serving County and Carrboro residents at Chapel Hill’s main library could dramatically change

County Manager Frank Clifton – as the man dealing with $ and cents – points out that county doesn’t control the level of service Chapel Hill offers – contrasts the $3M Chapel Hill spends against the $1M total the County spends ([cw] which includes the existing $250K subsidy to Chapel Hill for County residents)

Frank – using the %40 County resident usage number with the $3M Chapel Hill exceeds the total current County outlay of $1M – ([cw] hard to justify doubling or more County library services budget to just meet the $1.2M+ additional operational expenditure that the new expansion will place on Chapel Hill) – How will formula reflect that Chapel Hill wants “cadillac services” on a “Volkswagon budget”? ([cw] comparison is my words but captures Frank’s comment).

Gene – points out that the town has funded $6+ M of usage County residents over the last 10 years – references the many historical problems getting County help – it isn’t fair that Chapel Hill has supported this level of service for County residents – brings up the widespread anger ([cw] a bit debatable) and politics of the issue – including how it might play out – looking at Barry – in this years Commissioner race. Says “the votes are there” on Council to require upping usage fees on County residents ([cw] $65/year to start with).

Mike – “very concerned” about the gap between $500K the BOCC (Board of Commissioners) proposed and the $1.2M Chapel Hill is requesting – dedicated to resolving funding inequity issue by Dec. 2010 ([cw] when he leaves office)

Mike – any contribution “must reflect that this year’s” terrible County budget problems, next year’s anticipated problems ([cw] which look pretty dire for the County) – any increase starts low and increases over the next 3-4-5 years to a capped $500K.

Frank – the problem is that Chapel Hill’s current request is now and will always be way higher than the County’s total outlay for library services for everyone else – the formula has to take in account the needs of the rest of the county and that while Chapel Hill might want high levels of service/pay for high levels of service the Town can’t expect County residents to foot the bill….

Barry – using the %40 County usage number as a baseline, roughly %1 per usage reflects $25K if County is to meet Chapel Hill’s basic request for $1M – the problem is “that we need to consolidate the systems” to insure a basic level of service for everyone

Gene – sounds good but is way too complicated to do in the next 3 weeks – consolidation and interoperability could benefit all of our residents but too many moving parts to get done in next three weeks ([cw] This emphasis on May 24th indicates to me that some on this Council are planning to push for the expansion irrespective of the Town’s ability to handle the debt and they will use any agreement hammered out by the County and Town as a smokescreen to deflect attention from the concerns Laurin and Matt so succinctly underlined two weeks ago).

Sally asks about interoperability – “What do you mean by interoperability?”

Frank – seamless access to all facilities. comparable levels of service

Gene – interoperability will effectively mean a one-way transfer given given the high level of service in Chapel Hill and the low level service in the County….

Mike – giving the $500K request by Chapel Hill ([cw] 1/2 the current County library services budget) will restrict our ability to improve and expand services elsewhere – “this isn’t the year to do it…[especially]…with a $5M [County] deficit…”

Gene – passionately “no more bullshit…this is the year” – “we have to show [movement] in the next 3 weeks…”

Mike – “What about $500K over 3 years? Will you walk away?”

Gene – gut feel is that Council will walk away

Sally – Council hasn’t set a drop dead number – they need to take phased in offer to increase to $500 3-4 years out back to Council

Gene – feels that 2/3rds of existing County users could be converted to usage fees

([cw] HOW BEST TO DECIDE BEFOREHAND IF THAT’S REASONABLE? 2/3rd RATE SEEMS DRIVEN BY NEED TO GET $500K RATHER THAN ECONOMIC ANALYSIS OF WHETHER PEOPLE WILL PAY $65+ PER YEAR) ( [cw] what is the figure need to charge those 2/3rds to get to the starting $1.2M increase in the operational budget the expansion will necessitate? Where’s the analysis showing the uptake rate as the yearly charge goes from $65 to $100 to $135 or more needed to hit that $1.2M number?)

Gene – points out that 1/3rd conversion at $65 gives 250$K which breaks even with current County subsidy (if Chapel Hill opts for a usage fee then the BOCC has already said they will drop the current $250K subsidy) – 2/3rds of the current %40 of County residents using the Chapel Hill Library need to sign on to get $500K

Frank laughs when Gene says that 2/3 will pay $65 – points out that even %100 conversion wouldn’t meet $1.1M required increase…

Barry – What the formulas shown by Chapel Hill demonstrate is that the County’s commitment should be $2m

Gene – “hopefully economic conditions will improve” and the ability to pickup the slack will come soon – Frank shakes his head ([cw] he’s in the endgame of preparing this year’s County budget and is well aware of the dire funding crunch the County faces next year).

Barry/Frank – we hear next year will be worse for the county – much worse

Gene – we feel that $2m is right but asking for $1.2M now – “it’s not like we’re asking for the $6M we already spent back”

Frank – observes it isn’t $2m, it’s $4m because people will expect any concomitant increase in library services will spawn citizens demands for a concurrent increase in school budget – doesn’t make logical sense but “experience shows” that is the way these things play out

Mike – What about a 4 year plan – up to $700K – token amount 2011 of $10K – $220K next 2 years after that – no more than $700K ([cw] $250K existing subsidy+$10K bump 2011+two $220K bumps after that) but make that increase contingent on interoperability agreement

Sally – concerned about the cost of interoperability – doesn’t think we can approve this without understanding the cost better – what share the Chapel Hill Library will pickup

Mike – references 2 librarians discussions on significant costs – mainly to County – to integrate the systems – starting with “our computer systems” which “don’t talk to each other now”

Sally -” $10K isn’t going to fly with our Council”

Gene – “this isn’t a good faith commitment Mike especially given the history”

Mike – hard sell given the huge cuts in social services, etc. How do we justify “giving money to affluent Chapel Hill when we’re cutting money to foster care?” and needy school children

Gene – “the shit storm will fall on all sides if we go to usage” fee – reiterating the high need this year ([cw] only as a consequence of doing an expansion this year)

Gene – “$10K is insulting” – has seen this developing for years ([cw] WHY IS IT SO NECESSARY THIS YEAR – ONLY BECAUSE THEY WANT THE EXPANSION!)

Barry – “We don’t have the money at least as it looks now” – “we haven’t seen the budget” – comes out mid-may – if Fed economic stimulus assistance money for teachers is cut next year (ARRA) “we’re going to bleed teachers out of each system”

Sally – We have colleagues who want to see a good faith agreement by the county – “$10K increase doesn’t come close”

Gene – “we don’t expect $250K frankly” this year but do expect something higher than $500K or $700K

Frank – this week we’re in the middle of asking all departments to make another round of cuts to meet the budget

Mike – we set aside money last year for school renovations and building library services in southwest County – “politically untenable” if we raid that fund – as it looks like the County might borrow from that fund – would not support any increase in library funding if that fund is raided

Gene – “You’re spending $180M this year” how long can we wait? – we’re constantly told to wait – “we already paid $7M” over the last 10 years – we are “not asking for it back” but “the County has to move” on this….

Frank – current base budget will go down $4M plus increase costs of $4M – “still trying to find $500K here, $50K there” – next year we’re going to ask for continued decreases in the library budget

Barry – long-term is all we can do – “if you can believe in our [BOCC] good faith” then maybe we can work something out…

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That’s it! About hour or so of notes.

Next steps: County Manager will take comments and proposal made by Chapel Hill into consideration, bang it against the budget realities he and the County face, prepare a presentation for the BOCC and craft a possible response to Chapel Hill. Expectation is something will be back on the table prior to May 24th deadline set by Chapel Hill’s Town Council.

It will be interesting to see if Council implements the usage fee and has the fortitude to weather what Gene appropriately noted as a “shit storm”.

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