Category Archives: reserved funds

The $500,000 Raid On The Middletown Library Won’t Be The Last

The Township Committee adds two additional Library Board members, sets the stage for majority control in 2012.

by guest blogger Linda Baum

A couple of months back, there was a rumor that the Township Committee intended to appoint two additional members to the Middletown Library Board, bringing the number of Board members from 7 to 9. (By comparison, keep in mind that the Township Committee consists of just 5 people.)

As it turns out, the rumor is true. At the Township Committee’s November 21, 2011 meeting, Ordinance 2011-3048 was introduced to add two new Library trustees. A public hearing on the Ordinance will be held at the Town Committee’s regular meeting on Monday, December 19, 2011 at 8:00 p.m.

Two of the existing Board members, Mr. Milne and Ms. Raymond, are up for re-appointment at year end, and another Board member was already booted and replaced with Committeeman Settembrino at the start of this year. Add to those three spots the two new ones, and that’s a 5-4 majority to do the Town Committee’s bidding. So it would seem our mayor and his fellow Town Committee members have no intention of stopping at half a million.

As many of you know, I regularly attend the Library Board meetings and have since February of this year. I’m the only member of the public who regularly attends. If the woman who frequented Board of Education meetings was seen as the natural pick for that Board, I figure that makes me the front runner for one of the two new spots on the Library Board, right??? So I am submitting to the Town my application for Library Board membership, a futile effort since I am not likely to be appointed. My guess is that the two new appointees, or likely four if Mr. Milne and Ms. Raymond are replaced, will be members of the Republican Party faithful who are already serving on one or more other boards or commissions. I guess we’ll find out on Township Reorganization Day.

To understand what these changes could mean, let me recap a little history. In a taxpayer-funded play in 2010, Township attorney Brian Nelson succeeded in having New Jersey law changed to require our municipal public library to relinquish to the Township a significant portion of its surplus. (Previously, the law allowed for the transfer of funds but there was no requirement.) Now, the Library can keep some surplus — an amount no more than 20% above the prior year’s budget — but has to fork over the rest, with some exceptions. Some Library monies are protected under the law and are not considered surplus, such as restricted reserves for capital projects.

You may recall that of the $500K taken from the Library this year, half was restricted reserves that the Township was not entitled to legally. That’s one of the reasons such a battle erupted. The Library trustees were out-maneuvered from the start and in the end most felt obligated to pay the full $500,000. It was not without recognizing the precarious financial condition it left the Library in.

Faced with the substantial reduction in funding, the combined result of the $500K raid and an overall revenue decline in line with lower assessments, the Library trustees have been diligent this year about reducing costs where feasible without disruption to services. However, success in reducing the operating budget also has the effect of reducing the amount of surplus that can be retained (20% of the budget), leaving more on the table to be taken by the Township. In addition, the trustees have had to balance the need to set aside reserves – for unexpected expenses or to compensate for annual fluctuations in revenue – against what they stand to lose. The greater the reserve, the more the Township can take.

At its November 16th meeting, the Library Board discussed moving $122,000 to the capital fund to save for the parking lot expansion. Restricting a portion of the reserves for capital projects is supposed to protect the money from seizure by the Township. It won’t. The Library Board need only vote to unrestrict the funds, as was done this year. While the current Board is not likely to do that a second time, the newly re-structured 9-member Board might, and the Town Committee can ensure that it will by appointing the “right” people to the Board.

Sadly, the result may be a Library Board that fails to act in the best interests of the Library.

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Filed under Board of Trustees, guest blogger, Linda Baum, Middletown Library, Middletown NJ, reserved funds, resolutions and ordinances, surplus funds

>Many Questions Remain; Middletown’s Library Surplus Issue Far From Settled And Could Be Derailed

>There was another Middletown Library Board meeting this past Wednesday night and if you weren’t there to witness the goings on you missed a lot. Evidently many questions arose over the the time table for which the Township Committee expects to be paid the $500,000 that it practically extorted form the library in order to fill a budget gap in it’s own 2011 budget, and what was required by the State Librarian before those dollars could be legally transferred.

If it weren’t for the lone member of the public who attended this meeting( that’s correct, no one else other that then Board members were in attendance), Linda Baum, no one would know that there is a problem brewing over these funds once again.

According to the NJ State Librarian, before surplus funds can be transferred from the Middletown Library to the Township Committee, a strategic plan must be prepared. The plan would need to include a number of focus group opinions, which would take time to complete. Only after this was all completed, could the plan to transfer funds from the library to the township be completed. Library Director Susan O’Neal estimated that it would take until August to complete.

Of course this did not sit very well with Township Commiteeman Kevin Settembrino, who was appointed to the Library Board by the mayor. Settembrino wanted the transfer of funds to take place with in four weeks so that the the Township’s budget could be finalized.

Ms. Baum took minutes of the meeting for herself and passed them along to me to share:

The library mtg ran three hours. Got heated in parts. The number of people in the audience including me: One. Here are the main points:

There are certain requirements the library must meet before the state librarian will approve the giveback. Formation of a strategic plan is required, and focus groups are a required part. Ms. O’Neal estimated an August 2011 completion date for both. Mr. Settembrino didn’t like that at all — he felt it would delay finalization of the town’s budget. They discussed hiring a professional to conduct the groups at a cost of $3K max. A resolution to that effect was voted down 3-2. Some felt it could be done by library staff, while others felt staff lacked the time and that focus group participants would not be comfortable with library staff leading the groups. A few didn’t want to spend money to give away money. Ms. Breen asked Kevin if the town would pay for it since they gain from it. He declined of course. Issues were cost, whether they could get community participation, and whether or not there was a need for new focus groups or if existing data could be used — a survey was done in 2004. Mr. Settembrino proposed using the 2004 survey results to produce the focus group report for inclusion in the new strategic plan. A resolution to do it internally was passed 3-2. Mr. Settembrino revisited the timeline and asked for completion in 4 weeks. Ms. O’Neal said the end of May would be more achievable. Mr. Milne questioned if, by doing the focus groups themselves and/or by utilizing data already in hand, the library would be at risk of not getting the approval from the state librarian. (Let’s hope so.) They don’t know how much leeway they have.

(I thought of a few good ideas to simplify and speed the process, but I realized whose side I was on and kept quiet.)

It got heated when Mr. Settembrino scoffed about library employees resistance to doing the extra work in light of their recent raises (you know, the one dollar per week). Wendy Latona let him have it. She brought up the $15,000 stipend.

The next issue was about the 2009 audit results. Discussion was specifically about around $88K in library money that was left on the table but not known about in February. Kevin asked if this would affect the decision on the giveback. The board felt the issue was handled and would not affect the giveback. Ms. O’Neal said she had not yet talked with Nick Trasente, and wanted to address 2009 as well as 2010 issues. I got a little confused here. I asked if the board’s concern about the audit related to just the $88k issue. Yes, they said. I said that I had reviewed the corrective action plan and felt much was not addressed. I asked them to consider revisiting the giveback decision as new information comes to light.

Mr. Settembrino asked when the preliminary 2012 budget comes out. Ms. O’Neal said the draft budget (in the range of $3.5M) is done in October when the official rateables comes out. Settembrino pushed to get it earlier, saying the rateables is out now. Susan said she is required to use the official figure released in October. Kevin said he felt leaving the initial release till October didn’t leave enough time to review or make changes as needed, or whatever. Ms. O’Neal replied, “Duly noted.” I don’t know if there was any offer to meet an earlier target. Ms. Breen complimented Susan on being a great director and told Kevin it seemed like he was scolding.

There were other topics discussed relating to library spending for travel and repairs. The Lincroft branch has termite damage in the entryway.

Coverage or lack thereof for underground storage tanks was touched upon. Property coverage for the library is included under the town’s policy, which is an excess policy. Kevin will check into coverage.

There was a resolution to allot more money to the library’s attorney, whose fees ran over due to the recent funding battle. It passed.

Minutes from the 2/16 and 3/16 mtgs were adopted. I have a printed copy of minutes from 2/16 – 19 pages. I didn’t get a copy of the 3/16 minutes, but will ask Wendy for it.

Feel free to distribute.

Linda

I’ll be posting more about this over the next couple of days.

Things here just don’t seem right to me and if Settmebrino or the rest of those on the Township Committee wanted their money right away, then I think they should have done their homework properly to find out if there would be potential problems. But like so much that those that run Middletown do, this attempt to wrestle funds from the Library was done haphazardly and with authoritarian zeal without knowing the consequences of their actions.

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Filed under Board of Trustees, Kevin Settembrino, Middletown Library, Middletown NJ, Middletown Township Committee, NJ State Library, reserved funds, State Librarian, surplus funds, Susan O'Neal

>In Case You Missed It: Local library budgets get separate line on property tax bill: Law might shelve impulse to merge

>In case you missed it, there was an article posted Sunday on the Asbury Park Press’s website that would be of particular interest to those that had been following the drama that had been playing out between Middletown’s Township Committee and the Middletown Library over the past 2 months.

A new law signed by Gov. Christie on Tuesday of last week, created a dedicated line on property tax bills for funding municipal libraries and makes a library’s budget exempt from the state’s new 2 percent cap on annual spending increases.

…Although taxpayers will continue to pay a percentage of their property’s assessment to fund their local library, the money will no longer be considered part of a municipality’s budget, making the process less political, said Assemblyman Upendra J. Chivukula, D-Somerset, one of the law’s sponsors.

“Unfortunately, some municipalities were not providing the funding to their libraries on a timely basis,” said Chivukula, who noted that library usage has increased statewide since the recent economic downtown.

The law should help to bring parity between local libraries and county systems, which already had dedicated line items exempt from the cap restriction, said Patricia Tumulty, executive director of the New Jersey Library Association.

“This was a very important piece of legislation,” Tumulty said….


What impact, if any, would this new law have had if in the battle between Middletown and it’s Library if it had been known prior to the Library agreeing to the Township’s terms for transferring $500,000 of reserved forms from the Library’s coffers to that of the Township?
I’m not sure, but I think the Library wouldn’t have felt the immediate need to pony up the excess funds over it’s legitimate surplus, in an attempt to head off the Township from transferring the operations of the Middletown Library to the Monmouth County system. I think the negotiations between the lawyers for both sides would have been extremely different.
The library’s Board of Trustees gave up a lot for very little in return and the impact of the Boards decision will be felt by the library for an extremely long time based on the wording of the 3 Library resolutions passed at it’s March 16th meeting, which authorized the funds transfer.
As the article states, local municipalities that fund their own library system can’t just transfer control of it’s library to it’s county system on a whim. If the municipal library system was created by an ordinance, as most have been, then the municipality would have to propose a new ordinance stating it’s intention to transfer it’s library over to the county and then place the ordinance on the ballot for referendum approval by township residents.

…For decades, the state’s policy for dissolving libraries has been that municipalities must repeat whichever process was used to create the system originally, Tumulty said. Typically, that has meant a public referendum is required, she said….

I would have like to have seen what would have happened if residents of Middletown did have a say in the matter. I don’t think such a referendum would have gained approval.

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Filed under Asbury Park Press, Middletown Library, Middletown Township Committee, reserved funds, resolutions and ordinances, surplus funds, voter referendum

>Middletown Library Issues Three Resolutions to Release Excess Funds To Township

>The Middletown Library made it official last week when it issued the three resolutions requested of it from the Township, that would authorize the release of $500,000 from previously reserved library funds, to the Township.

These resolutions have no yet made it onto the Middletown Library’s website, but i was told that they will be posted soon along with meeting minutes from the March 16th Board of Trustees Meeting.

Resolution 2011-23/Unrestricted Library Capital Reserves, Resolution 2011-26/ Forfeiture of Unreserved Funds and Resolution 2011-27/ Intent to transfer excess funds to the municipality of Middletown pending approval of the NJ State Librarian.

Resolution 2011-23, authorizes the release of $500,000 of reserved funds to the Township.
Resolution 2011-26, states that the Library Board of Trustees have agrees to forfeit 2008 & 2009 budget surplus of $196,831 as part of unrestricted funds o be transfer to the Township, and Resolution 2011-27, reaffirms the Library’s intent to transfer $500,000 to the Township once approval is given by the NJ State Librarian.
You can read the resolutions by clicking on the hyperlinks above if you are interested to read them.

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Filed under Board of Trustees, Middletown Library, Middletown Township, reserved funds, resolution 2011-23, resolution 2011-26, resolution 2011-27, surplus funds