by guest blogger Linda Baum
This is my second post about the 1/18/12 Library Board meeting. See my January 24th post to read about the controversy over the Board’s leadership. A lot has happened since the January meeting, as you all know. Library Trustee Sherry Miloscia resigned from the Board for personal reasons effective January 20th. Trustee and Board President Randall Gabrielan resigned from the Board effective February 7th. Seven out of nine members remain, and the Township Committee now has majority control of the Board with 4 out of 7 votes. If they fill the two empty seats, the Township will have 6 out of 9 votes and a two thirds majority.
The January 18th meeting was the first for the newly expanded 9-member Board. The five new faces on the Board presented a challenge for Library Director Susan O’Neal, who is to be commended for responding to a great many questions with patience, good humor, and
The next Library Board meeting is this Wednesday, February 15th at 7:30 p.m. at the main branch on New Monmouth Road. I encourage you all to attend. (FYI, the meeting actually begins at 7:00 p.m., but the Board will go into closed session for about a half hour right after the meeting is called to order.)
Much was discussed at the January meeting, which ran almost 5 hours. Since there is incorrect information “out there”, I wanted to provide all the facts, making this my longest post by far. I organized topics by heading to make things easier for readers, and had to break up the post into three separate parts for the blog, each still long. This is part one.
THE PARKING LOT EXPANSION
Early in the meeting, it was announced that resources now exist for the parking lot expansion that was put on hold last year. The initial traffic study for the lot expansion has already been completed by Maser Consulting. The key parts of the project are improvements in safety (more lighting, traffic calming, crosswalks), more handicapped spaces, a drop off zone for short term parking, and additional parking spaces (approximately 35 more spaces).
The project is expected to cost roughly $122K-150K. Available monies include reserves, largely from expense savings that the Library was able to achieve last year, plus state aid monies.
Recall that per the 2011 agreement with the Township, the Library has two options for paying for capital improvements – they can pay cash or pay the debt service on bonds/notes issued by the Township. Libraries are not allowed to themselves issue debt, so the two payment options may not represent anything new. The Board has always preferred to save up until they have enough money for a project rather than to incur debt and pay interest. The Township does the opposite.
Also, the Library is now required to use the Township’s consulting engineer, T&M Associates, for any engineering work. T&M is not on retainer with the Township, so will bill for its services. Since the work is being directed to T&M without competitive bidding — the Library Board would normally request bids/quotes for this job — the cost could be higher than what the Library would otherwise pay.
THE POSSIBILITIES: “Restricting” about $150,000 in reserves for the lot expansion is to be discussed at the Board’s February 15th meeting. Since, by law, library reserves that are restricted for capital projects cannot be taken by the Township, the new trustees are sure to be opposed to it. I suspect they will make the case for allowing the Township to sell bonds/notes to raise money for the work. I suppose the new trustees could take a different tack and say the lot expansion isn’t necessary. However, part of the reason for the project is to improve safety, and I don’t think the Township would want to be seen as being against that.
Aside from leaving more reserves on the table for the Township’s use, the Township would benefit from the debt sale in several ways that I won’t get into here.
THE NUMBERS: If the Library pays cash for the lot expansion, their current budget will show the total cost of the project, or about $150,000. If the Library pays debt service, the budget for each of the next 20-25 years will show the lower debt service payment, say $15,000. The latter option results in a higher budget in future years, but a budget cut of about $135,000 for the current year.
A $135,000 cut in the Library budget increases the “take” by the Township by MORE than $135,000 — by $162,000. Here’s why. Per law, the Library can keep a portion of its unrestricted reserves equal to 20% of its annual budget. If the budget is cut, that “frees up” some additional reserves on top of the amount cut from the budget. In short, for every $1 cut from the Library’s budget, the Township increases its take by $1.20. A CAVEAT: The new Board could vote to hand over 100% of the Library’s reserves to the Township. If so, then one dollar cut from the library’s budget is just one dollar of reserves available for the taking.
State aid monies are off limit to the Township, so would remain with the Library. Any restricted reserves are protected, but can always be unrestricted by a willing Board.
THE 2012 BUDGET
Ms. Murray objected to the 2012 budget being approved in December before the new Board came in and said that it should be re-opened.
Ms. O’Neal pointed out that the Township typically requires the Library Board to have the budget for a year in place by October of the prior year. The Township didn’t need the Library’s 2012 budget as early as usual, so the Board had a couple of extra months to incorporate more finalized information. So the December approval was later, not earlier, than usual. Ms. O’Neal emphasized that the budget was adopted in line with required procedure, not in anticipation of a different point of view, as has been suggested by anonymous commenters.
Board president Randy Gabrielan advised that the budget is a planning document only that is not written in stone.
And while it wasn’t said, the budget for a year is supposed to be ready before the start of that year — that is the way most well run organizations do it, even if the Township doesn’t.
Because the January agenda was already full, Mr. Gabrielan suggested that a detailed discussion about finances be postponed until the February 15th Board meeting.
Marjorie Cavalier suggested that specific financial issues might be better handled by an ad-hoc committee. There was agreement that the Finance Committee would be reconstituted, and Ms. Murray will be on it.