Library Board Adopts 2010-11 Budget

Ann Arbor District Library board meeting (May 17, 2010): At its May meeting, the AADL board adopted a budget for the 2010-11 fiscal year – keeping the millage rate at 1.55 mills. Though the tentative budget discussed at the board’s April meeting had projected a $200,000 shortfall, the library staff is now anticipating less of a drop in tax revenues for the coming fiscal year. That increased optimism on the revenue front means that the approved budget does not require tapping the library’s fund balance.

Board members also discussed awarding a contract for HVAC work, and heard from the representative of a company that’s not being recommended for the contract. The board revised the library district’s boundaries in the Northfield Township area, and approved new legal compliance and conflict of interest policies.

AADL 2010-11 Budget

The board began the meeting with a public hearing on its proposed budget for the 2010-11 fiscal year, which begins July 1. No one came to speak at the hearing.

In his presentation to the board, Ken Nieman – AADL associate director of finance, HR and operations – noted that the library’s millage rate for the next fiscal year is set at 1.55 mills – unchanged from the current amount it levies. [Last year, the board had lowered its millage rate from 1.92 mills to the current rate of 1.55 mills. (One mill equals $1 for every $1,000 of a property’s state equalized value, or SEV.) See Chronicle coverage: "Library Plans to Lower Millage" and "Ann Arbor Library Board OKs Budget"]

Later in the meeting, the board voted unanimously to approve a resolution authorizing the millage rate to be levied by taxing authorities at 1.55 mills.

Nieman outlined changes in the budget since the board discussed it at its April meeting. [See Chronicle coverage: "Library Board Addressed Budget Shortfall"] Library staff has revised the anticipated decrease in tax revenues: The proposed 2010-11 budget now projects a 3.3% drop in tax revenue, rather than the previously forecast 6% decrease. A 3.3% drop would put tax revenue for the 2010-11 fiscal year at $11.29 million instead of the $10.99 million the library previously anticipated. [Taxing authorities, including AADL, received additional data in late April from the Washtenaw County equalization department, which presented a report on tax revenues at the April 21, 2010 county board of commissioners meeting. The report showed that while property values in the county dropped, the decrease wasn't as much as expected.]

The extra $300,000 in revenue eliminates a previously anticipated $200,000 shortfall, which would likely have been covered by tapping the library’s fund balance.

As discussed at the board’s April meeting, the library is making cuts in several areas, given the anticipated drop in revenue. Those include cuts in capital outlays (down to $190,000 from $234,843 for the 2009-10 fiscal year), communications (from $214,451 to $200,000) and software licenses and maintenance (from $152,375 to $130,000). Library programming funding also is being cut from $290,517 to $250,000 in the fiscal 2010-11 budget.

However, the additional $300,000 in tax revenue that the library staff factored in since last month resulted in some alterations to the proposed budget. The budget for materials will see a roughly $20,000 increase (from $1.83 million to $1.85 million), as opposed to a $30,686 cut that was previously recommended. Utilities also received a boost to $465,000, up from $415,000 in the originally proposed budget. The library has maintained the same proposed funding for employee salaries and wages (with $5.844 million allotted for salaries and wages and $1.5 million for benefits) and circulation ($75,000). The library’s total proposed operating expense for the 2010-11 fiscal year is $12.3 million.

In addition to unanimously approving the 2010-11 budget, board members also voted unanimously to adopt the 2010-11 budget as a line item budget and to authorize various disbursements related to the budget.

Other Financial Business

Ken Nieman informed the board that the library’s utilities and communications were over budget for April. Utilities costs were $33,995 compared to the budgeted $31,250; communications were $37,095, but had been budgeted at $12,833. AADL trustee Carola Stearns wanted to know whether utilities were over budget due to rates or usage. Nieman responded that it was mostly because of rates, although usage also factored in to some extent.

The library also received $20,536 in state aid during the past month for the Washtenaw Library for the Blind and Physically Disabled @ AADL program. Nieman said the library will receive another, similar amount of funding from the state later this year.

HVAC Equipment and Maintenance Contract

The board discussed which contractor should get the bid to provide HVAC equipment maintenance and repair service for the library. Nieman explained that the library’s current mechanical services contract with Pace Mechanical will expire on June 30, 2010. The library began the bidding process earlier this year and received responses from three companies: Goyette Mechanical, Pace Mechanical and Campbell Inc. The library later removed Goyette Mechanical from consideration after it became clear at a post-bid meeting that the company did not understand the scope of the agreement, quoting a price for quarterly maintenance instead of total coverage.

Library staff determined that the remaining two companies are highly recommended, reliable and capable of providing the necessary service. However, Nieman said the administration recommends that the library award the bid to Pace Mechanical, since the company has served as the library’s contractor for the last four years and is more familiar with recently installed equipment.

Kevin Rodgers, a Campbell Inc. maintenance solutions specialist, spoke during the public commentary portion of the meeting. He informed the board that his company had previously worked for the library – about four years ago – and they lost the contract due to the bidding process and not due to their performance. Rodgers said Campbell Inc. has advantages in that it’s based in Ann Arbor and is familiar with the library’s facilities. He added that his company would provide more than Pace Mechanical, specifically by conducting a feasibility study of all library buildings in order to determine ways to lower operation costs.

Nieman told the board that he thought the feasibility study could be helpful in lowering energy costs, although he acknowledged that he didn’t know much about the subject. AADL board secretary Margaret Leary questioned whether investing in improving operating costs would be worth it, specifically in the case of the deteriorating downtown building. However, AADL treasurer Prue Rosenthal said she thought it would be interesting to see what Campbell had to offer.

Nieman said that the library would not be committed to take any action in response to Campbell’s study. Overall, board members seemed to like Campbell’s status as a local company; Pace does not have an office in Ann Arbor. The board did not vote on the issue during its May meeting.

Changes to Boundaries, Bylaws, Policies

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Library District Boundaries

The board voted unanimously to approve a resolution to modify the library district’s boundaries so that there’s no overlap with the Northfield Township Area Library’s district, located north of Ann Arbor. Residents in Northfield Township’s district will continue to have access to AADL resources. [.pdf file of boundary changes]

The board adopted the bylaw revisions it had discussed at previous meetings, including its April board meeting. AADL board president Rebecca Head reminded the board that the bylaws were altered to stay in sync with the Ann Arbor Public Schools board of education election schedule. Under the revised bylaws, board members’ terms start in November instead of July, and the board’s annual meeting is moved from July to the first meeting of each new calendar year.

Conflict of Interest Policy

Board members voted unanimously to adopt a proposed conflict of interest policy that they discussed during their April meeting. The new policy was written at the suggestion of the library’s auditors and applies to the library’s administrative employees with significant decision-making authority (called “interested parties”), such as the director, associate director and staffing coordinator. The policy serves to prevent conflicts of interest that occur when “an interested party directly or indirectly benefits or profits as a result of a decision, policy or transaction made by the Library.”

Legal Compliance (Whistleblower) Policy

Another resolution that gained unanimous approval involved adopting the proposed legal compliance policy the board discussed during its April meeting. The legal compliance policy makes it clear that the library will comply with all applicable laws, and employees who report policy violations will be protected. The policy states that employees who have concerns regarding a suspected violation should report it to the director or the chair of the board of directors. It states that they will not be discharged, threatened or discriminated against for reporting the violation.

Director’s Report

AADL director Josie Parker informed the board that the Washtenaw Library for the Blind and Physically Disabled @ AADL held a vendor fair – “VISIONS 2010: What’s New In Technology and Services for the Blind and Visually Impaired” – on May 12 at Washtenaw Community College. Parker said the event was very successful, with more than 500 participants and over 35 vendors.

Parker also announced that the library would hold an awards ceremony for its 2010 Teen Short Story Writing Contest on Saturday, May 22 at the downtown library from 1:30-3 p.m. The library received 253 submissions from kids in grades 6-12.

The board discussed Parker’s experience representing AADL as a panel participant at the Fellowship of American Bibliophilic Societies Annual Symposium on May 15, 2010 at the Gerald R. Ford Library in Ann Arbor. The topic of the symposium was “Expansion of Knowledge in the 21st Century Library” – the event also was sponsored by the Book Club of Detroit. Parker said the symposium was a great opportunity to talk about public libraries and national trends relating to them.

Director’s Evaluation

Head read the board a memo concerning Parker’s performance evaluation. Parker was praised for her outstanding work, accomplishments and visionary leadership. Specifically, the board praised Parker for not increasing her own salary during recent difficult economic times. The memo summed up the director’s financial management as “excellent” and noted her commitment to providing remarkable customer service. The memo concluded by declaring Parker an “excellent and outstanding” library director. Parker responded by thanking the board, saying she appreciates the opportunity to serve as AADL director.

In its last action of the meeting, the board voted unanimously to begin its next regular meeting with an executive session for labor negotiations, discussion of real estate and opinion of legal counsel.

Present: Rebecca Head, board president; treasurer Prue Rosenthal; secretary Margaret Leary; trustee Carola Stearns. Also: AADL director Josie Parker.

Absent: Trustees Ed Surovell, Jan Barney Newman, Barbara Murphy.

Next meeting: The board’s next regular meeting is on Monday, June 21, 2010. The public portion of the meeting starts at 7 p.m. in the library’s fourth floor board room, 343 S. Fifth Ave., Ann Arbor. [confirm date]