Carrboro Mayor Mark Chilton is losing patience with the discussion over how Chapel Hill is going to pay for its library.
The library is the most heavily used, per capita, in the state. But an expansion is on hold until Chapel Hill figures out how to pay additional operating costs that could raise taxpayers annual town tax bills $30 a year.
The problem? Forty percent of items circulated go outside Chapel Hill, but Orange County government contributes only 11 percent of operating costs. Chapel Hill has tried to get the county to pony up and even floated the idea of asking Carrboro for money.
Now Chapel Hill Mayor Mark Kleinschmidt, stuck on county negotiations, wants a meeting with Carrboro.
“I suppose we have to, although I do not look forward to it,” Carrboro Mayor Mark Chilton replied in an e-mail.
Libraries are a county function and that’s where Chapel Hill needs to solve its problem, the mayor said.
“I am no way – no how – never going to vote to put Carrboro into the same dysfunctional relationsip with either the County or Chapel Hill that the two of them already have with each other,” he wrote.
In an interview, Chilton said Carrboro is a small town and can't afford to pay for using Chapel Hill's library. In his e-mail he says Chapel Hill and Orange County should open a branch downtown instead of expand, putting library services in walking distance of much of the population, including low-incom people of color who might have difficult getting to libraries farther out.
Comments
Solution for the Library
Sun, 02/07/2010 - 11:44 — pmcgahanThe folks at the Chapel Hill library say that 40% of it’s patrons are from outside the town limits. If that’s the case, then I have a plan to eliminate the need to expand the Chapel Hill Library.
The Town Council should immediately proceed with its threat to charge out of town residents a $100.00 annual fee to use the library. The new fee will force a significant number of out of town patrons to drop their membership and use the county’s library system. The result will be that the Chapel Hll Library’s membership will shrink by 20-40%. The reduction in membership will eliminate the need to expand the current facility. In fact, the reduction in usage will reduce the library’s current operating expenses and the new revenue can potentially offset the likely loss of the county’s $250,000 annual contribution.
If the town sees that a significant number of out of town residents are maintaining their membership, then they can proceed with the expansion.
I wrote this note a little sarcasticly, but my point is that the county is already paying for a decent library system. Maybe that wasn’t the case 20 or 30 years ago, but it is now.
The town’s library should primarily serve the residents of the town or go ahead and merge with the county library system.
Qu'ils mangent de la brioche
Sun, 02/07/2010 - 22:39 — ManyNot to say they do not provide a valuable service, just that the service being provided is far, far grander than can be sustained on their own merit. Isn’t that what is being said here? Like the current state of the print media, llbraries at their current size do not have a viable business model. At the same time we are entering a socially, politically and financially austere period. Given the capabilities of the internet, libraries as we know them are a sunset service and any fee structure will “right size” them more quickly.
Better that people pay per use for Library services than for essential services that affect public health.
The Problem with Circular Arguments
Sun, 02/07/2010 - 12:15 — fhblackThe problem with circular arguments is that they do not move the debate forward.
1. The 40% number is for borrowers and not patrons.
2. Even with fewer borrowers who are non-Chapel Hill taxpayers, the CHPL is still too small to meet its stated mission. It opened in 1993 already too small because voters disapproved one of the bonds for $2 million by some 90 votes - that bond money would have built what we needed. Thus, WE WERE TOO SMALL the day the doors opened.
3. Usuage includes meeting space, computer space (one of the greatest services in demand today), program space, research areas, and yes, bookshelves. Ours is a heavily used space and it is too small for our needs.
4. Note where a good chunk of OC tax dollars come from. We Chapel Hill taxpayers support a great County Library but it is not close enough to most residents and the "branch" in Carrboro does not meet our needs.
5. Those living in the real world know that a merged system would not mean more funds available for a County library in Chapel Hill that would meet our needs.
6. Not accepting County dollars and charging all non-Chapel Hill taxpayers a users fee like we are already doing for those outside of Orange County is the ony thing that will be fair to all.
Just One Question
Sun, 02/07/2010 - 14:52 — pmcgahanWhy does Chapel Hill need to take on the burden of providing library services to the entire county when the county has it's own library system?
Never the Intent
Sun, 02/07/2010 - 15:40 — fhblackIt was never the intent of the CHPL to provide services for the entire
County. As the CHPL became recognized as the quality library that
it was, more County users living near to Chapel Hill came there. That is when we asked the County for help to supplement the funding, as more and more non-Chapel Hill taxpayers were using the library. The County Commissioners agreed to support the need and also to do a major study of library needs and services in Orange County.
As the years passed, the number of County users increased but the money stayed the same. The same dollars provided less support as the budget grew, hence the problem we now face. As Orange County has a beautiful new facility, will people act differently?
People act in their own interests, and if the CHPL is the closest to them and satisfies their needs, that's where they will go - especially if there is no additional costs associated with that decision. People in other counties may also be close, but they know that there is a cost. Some are willing to pay it and others are not. They are voting with their pocketbooks, just like Orange County residents should be asked to do.
A Couple More Questions and a Comment
Sun, 02/07/2010 - 16:51 — pmcgahan1. If I was a County Commissioner, why would I send money to the Town of Chapel Hill so that they could run their own Library?
2. Shouldn't the County focus on putting County money into the County Library system?
3. Just because the Town of Chapel Hill wants to operate a Library that it can't afford, why should the Town expect the county government to help pay for it?
If the Town of Chapel Hill wants the County to help pay for their Library, then the two entities should merge. However, I just don't think that Chapel Hill will ever let go of that kind of control.
Giving Up
Sun, 02/07/2010 - 18:31 — fhblackIf you have read anything that I have written here, I must not be communicating if you still ask these questions.
North Carolina LAW requires CH to let County residents use the library if the County provides any funding. The County is providing funding because:
`1. So many County residents use CHPL since the County library isn't close and/or meeting their needs; and
2. It means not having to give more to the schools for better school libraries.
CH can afford a library for its citizens; it can't afford servicing the rest of the County.
Do you see how circular all of this is?
My Point is...
Sun, 02/07/2010 - 19:48 — pmcgahanThe Chapel Hill Library should fold into the county system.
Where does the extra population come from?
Sun, 02/07/2010 - 19:46 — tbucknerHow much of the growth in "county" users of the CHPL can be attributed to residents living within the ETJs of Carrboro and Chapel Hill? Chapel Hill and Carrboro have both approved all these developments, so I don't think it's fair to blame the county for those users. Plus, most of them have a Chapel Hill address, attend Chapel Hill Carrboro Public Schools and as Carrboro found out with the annexation, many of those folks don't even know they aren't Chapel Hill residents.
The cost to Carrboro...
Sun, 02/07/2010 - 00:02 — CitizenWillTo get back to Mark's apparent outrage at the idea of contributing to a facility that many in Carrboro use, here's an evaluation of the possible contributions.
%19 of the current 29532 cardholders reside in Carrboro: 5611
% of current users residing in Carrboro: knock some % off of the reported cardholders and add back in some number of folks w/o cards - students from the combined school system, UNC folks, etc. and I imagine it's somewhere north of 6,000 ( fun stat: ~ %30 of CH residents are cardholders, ~ %32 of Carrboro's are!)
Below I'm assuming the BOCC turns off the spigot.
Without expansion, using $2.4M annual figure, Carrboro's contribution would be: $456,000 or $81 per known cardholder.
With expansion, contributing to the new operations cost but excluding the capital cost: %19 of $3.2M which is $608,000 or $108 per Carrboro cardholder.
Finally, if Carrboro chipped in for both operational and debt service costs, starting with a first year outlay of $4.7M ($3.2M operations, $1.5M debt declining yearly): $893,000 or nearly $160 per Carrboro cardholder.
You can well understand why Mark says "no way – no how – never".
Only in Chapelboro.
Sat, 02/06/2010 - 20:00 — elvisboy77Chapel Hill should just raise its taxes to pay for anyone to use the library "without cost". That is the easy solution.
If Chapel Hill merged with Carrboro then they would have an even broader base to tax for this "free" library. Sounds like the perfect solution to me.
What's the difficulty...?
Sat, 02/06/2010 - 16:41 — ignc73I don't understand what the difficulty is. The library has a working computer system. Simply charge non-Chapel Hill residents for use of the library. In fact, why hasn't the library been doing this already? They have been charging for out of county users for at least a decade. Why not just throw the switch and charge non-Chapel Hill residents, as well? Is it a problem with some kind of charter that the libary has, or is it simply the result of poor management?
Charging...
Sat, 02/06/2010 - 18:42 — CitizenWillignc73, the BOCC has been pretty clear to-date that we'll lose the $250K if we charge for service.
Let's say we can work out a plan to subsidize folks that can't pay and decide to charge somewhere between $25 (UNC's yearly non-student rate), requiring at least 10000 paying patrons before we're back to $250K (at a $100 a pop we need 2500, etc.).
This is just to get back to where we are today.
If we accept the nearly $800K estimate for new services and use the existing outlay of $2.4M as a baseline the new operations budget starts at $3.2M. If we apportion %45 or $1.44M to the 13300 or so out-of-Chapel Hill cardholders (different than users as Terri and Fred noted elsewhere) and assume the OC will pull the plug on the subsidy, we need to collect $108 each annually to cover those out-of-town patrons.
Now, simple economics would suggest that given that $108 per head cost a percentage of folks will drop their cards, which, of course, drives the fee up for the balance of folks, which in turn shrinks their numbers, etc.
If you assume that the number of Chapel Hill users is roughly the remaining nearly 15200 cardholders plus some number of non-cardholding patrons - say 7800 to be generous - the current cost is $2.15M ($2.4M-$250K OC payment) spread over 25000 citizens or $86 a head. If the number of Chapel Hill patrons is closer to 20000 total, it's more like the $108 we need from out-of-towners in the above example.
If, instead of Chapel Hill patrons, you allocate the $2.15M ($2.4M-$250k OC subsidy) across the whole Town population - about 52,000 - the per capita cost is about $42. If allocated against the much smaller subset of taxpaying residential/commercial property owners, the per capita costs and related per property tax hit, of course, is much higher.
In 2005 the Town proposed 3 basic subsidy formulas that would require the OC to pay anywhere from $420K to $1.2M annually. In the subsequent 5 years those basic formulas have remained the basis for discussion (though the payments have jumped dramatically).
In all of the above I've omitted the costs associated with the new capital expenditure's debt service and temporarily transitioning library service elsewhere.
Annual debt service over the next 20 years for issuing the remaining balance of $14.26M in bonds for the expansion starts roughly at $1.5M and decreases from there ($1.5M 2010, $1.46M 2011, $1.42M 2012, etc.)
Let's just take the first few years and allocate the total costs based on the following two scenarios:
1) The OC continues to pay $250K, the rest of the tab - expansion, transition costs, new operations picked up by CH residents.
2) Non-CH cardholders pay a fee, BOCC turns off the spigot.
In scenario 1, the annual cost post-expansion starts at $3.2M for operations and $1.5M for debt service/amortized transition cost(which are negligible if spread over 20 years) or $4.7M. The OC picks up $250K, reducing the total cost of ownership for the new expansion to $4.45M.
Currently there are 29532 cardholders, so yearly per cardholder cost starts at $150 per head. Using Chapel Hill's population, per capita cost is roughly $86. Spread across the subset of CH taxpayers, it's significantly higher.
In scenario 2, %45 of the non-CH cardholders cover their "share" of the $4.7M - $2.11M annually - or roughly $160 per cardholder (ouch!).
Final point, while the debt service decreases year to year presumably the cost of operations will rise and keep annual outlays fairly high - around an additional $1.2M-$1.4M - for the near term.
This is probably a good bet as personnel account for %75 of today's operational costs - and personnel-related cost increases seem to have outpaced other costs significantly these last few years. The cost of capital - which is historically low (one bright spot in borrowing this year or next) - is fixed ($1.5M annually and falling).
This is the kind of analysis I'm looking for Council to perform in justifying moving forward. I believe that waiting until our aggregate debt load is lower, the economy stabilizes, tax revenues improve, etc. is the prudent course. I also believe that borrowing costs will remain low over the next 18-24 months so arguing we'll miss out on those savings is not supportable.
At least the goals of expanding the Library remain laudable, the payoff for the whole community pretty clear with public support remaining fairly high.
Contrast that with the Lot #5 project. How can Council continue to suggest we can do both?
Cardholders vs Users
Sat, 02/06/2010 - 22:30 — tbucknerI don't think you can use the 13,300 cardholders as your "user" number, Will. As we've heard over and over again, there are a lot of folks uing the library for purposes other than checking out books. If the town council decides to charge out of town users, they should require everyone who enters the library to swipe a card, whether they are coming for a meeting, checking out a book, or doing homework. Will that happen? It's probably not feasible which is why I agree with Mayor Chilton. The libraries should be merged so that we have one source of funding and equal services throughout the county. A Friends of the Library committee could supplement the county funding if county services are deemed insufficient by town residents.
Agree that cardholder isn't a good metric...
Sat, 02/06/2010 - 23:06 — CitizenWillTerri and Fred, I agree cardholder isn't a great metric but it is the one number we can derive based on the %45 non-CH cardholder usage statistic.
Using the per capita cost, which essentially takes 52,000 residents as a baseline, doesn't work well but that is where some of the published cost metrics come from...
In any case, I'm trying to "right size" the fiscal impact so we can discuss the tradeoffs in expanding the Library or building Lot #5 (not open a discussion on paying for services we might not use personally use or approve of...).
There's a Reason
Sat, 02/06/2010 - 19:32 — fhblackThe CHPL cannot charge anyone living in Orange County to use the library as long as the County provides funding to the library. This is NC law, not something local. So stop accepting money from OC and the Town leaders can approve a fee for non-Chapel Hill taxpayers living in Orange County.
Note also that there are Chapel Hill taxpayers who live in Durham County, so that's why we say non-Chapel Hill taxpayers.
Message to mayors and BOCC
Sat, 02/06/2010 - 14:21 — tbucknerI would like to buy my library card so that I can, in good conscience, use the library again. We're wasting a lot of time pointing fingers at who SHOULD pay. The discussion has become circular. No one has the funds to pay for what Chapel Hill wants to do. So why are we wasting time trying to get blood from a turnip?
My message to the two mayors and the BOCC: please stop this unproductive discussion and set a fee for non-CH patrons.
What is stopping you
Sat, 02/06/2010 - 20:02 — elvisboy77From paying them if you feel that way? Break out your wallet already, heaven knows Chapel Hill needs your greenbacks.
Mixed Messages
Sat, 02/06/2010 - 12:44 — fhblackMayor Chilton says that libraries are a county function and there should not be two systems in the same county. I guess I never heard him push this when he was a member of the Chapel Hill Town Council and they were looking to save money.
Then he says that "Carrboro is a small town and can't afford to pay for using Chapel Hill's library." Well, that means that they should help make it possible for non-Chapel Hill taxpayers to continue using the library, and that should only happen if there is greater Orange County financial support. Chapel Hill taxpayers should not and can not continue to subsidize the library for all who want to use it. Therefore, Chapel Hill may just have to charge a user fee just like they already do for non Chapel Hill taxpayers living in Durham, Wake, Alamance, Chatham and other counties. Right now they are paying $60 per year for the privilege.
I made presentations to the Town Council on behalf of the Library Board of Trustees starting in 1997, asking to appear before the Orange County Commissioners and request more support. We received $250,000 to support usage by Orange County citizens. Doing the math, that pays for some 4,166 users if they were billed $60 each. Clearly, many, many more than that are users. That same $250,000 from the County has remained unchanged all of these years, but it covers less and less of the expenses. At one point it was about 20% and now it is down to 11%. As 40% of the users are from OC, we clearly have a problem, as the OC support for usage should be closer to $826,000.
Mayor Chilton also seems to have no problem telling Chapel Hill what they should do. He may be surprised to learn that well before the plans for an expansion were submitted, a very thorough study was done on future needs and it included looking at a possible "branch" downtown. It was rejected for sound reasons. Just as the County does not have the funds to upgrade the branch in Carrboro, where would they get the funds for a Chapel Hill branch?
Chapel Hill spends a lot of money on their library ($4.75 M) because citizens want a quality library. Does he think those same dollars would just be handed over to the county by Chapel Hill? And don't forget where a significant chunk of that $250,000 contributed from the county comes from in the first place - Chapel Hill taxpayers!
Carrboro cannot afford
Sat, 02/06/2010 - 07:43 — elvisboy77To take any money from its sidewalks and greenways program, or its smashingly successful economic development program for a "dysfunctional" library.
The best way to solve this library problem, and lots of other duplication of services is to merge the two towns.
Let them use internet
Fri, 02/05/2010 - 22:28 — watchtowerI haven't stepped foot in a library since the day I learned Al Gore had created the Internet. What purpose do they serve any longer? It's so 20th century! Close them all.
$40 is tip of the iceberg....
Sun, 02/07/2010 - 00:28 — CitizenWillI'm concerned that the CHN continues to report the fiscal impact as solely $40 a year for a "typical" home owner.
Yes, you did underline that was due to the increase in operational expenditures but you continue to parrot the low-ball figure used by the Town Manager instead of digging deeper to see if that's a reasonable estimation or determining what that increase looks like 3-5 years out.
Beyond the operational increase, though, is the rather significant new debt, $20.1M in all for Spring 2010 (carrying a 2011 mandatory debt payment of $8.3M, $2.1M being the new issuance). The Town finance director showed a $700K deficit in managing the debt in 2011 using revenue coming from the supposedly "fixed" tax rate ear-marked for debt service.
That $700K has to come from somewhere. Right now the plan is to dip, once again, into the reserves (putting off, again, rebuilding them to the comfortably safe level we enjoyed just 5-7 years ago.)
Beyond that, issuing the Library bond now pushes our debt load to a level that if the economy doesn't rebound, sales revenues don't pickup, the Town is faced with an unplanned or extraordinary expense (Police Dept. repairs, parking revenue shortage which doesn't pay for the ridiculous Lot #5 project, etc) the Council will have to raise taxes.
Here's a short narrative, using the credit-card example the Council - sans Mark K. - is fond of, to set the framework for that discussion.
EDIT: In the interest of making this post and other comments more readable I moved the narrative here:
http://citizenwill.org/2010/02/03/chapel-hills-first-budget-meeting-of-2010/comment-page-1/#comment-103489
If anyone reads it, I know that I'm no great writer and that Joe's story is a bit tongue-in-cheek, yet Joe's scenario roughly parallels the reality of where we are today.
Even though it wasn't clearly broken out in the budget, it seems like some prior Councils - for whatever reason - had a debt limit pitched more towards what folks could comfortably pay as part of their taxes than what was demanded by covering the cost of needed and discretionary capital improvements.
The Town did issue a number of bonds and COPs to pay for required facilities - like the Town Operation Center - and discretionary additions - the Aquatics Center - and then set the current debt limit accordingly (like running your credit card to $10K and then calling to have your debt limit raised to $12K).
In other words, the ceiling bandied about by Council was set not based on a careful evaluation of the ability of this community to live within ALL of our means or the goals for maintaining a diverse, thriving community but by the de facto amount of debt taken on funding those new projects (and the guidelines for maintaining our Town's AAA bond-rating even if only by a whisker).
Issuing $20.1M in new debt for the Library expansion and other discretionary uses DOES REQUIRE dipping into reserves, at least initially.
And, finally, the Lot #5 project does present the riskiest discretionary expenditure before the Town. Our ability to pay the $8-12M debt associated with it is based on parking revenue and other related revenue projections which make very optimistic assumptions not supported by historical realities.