I've read list-member comments on the library dilemma with interest. The 2000 library referendum sure seems like a long time ago; and demolition of the old Central Library is almost complete. There has been talk here of book warehousing schemes, more customer-friendly book delivery services nearer our homes and workplaces, extended use of the interim library site and reuse of currently existing buildings around town. The Mayor has been actively soliciting ideas from list-members on this and other aspects of city operations-- short term and long term options. Here's some thoughts on the current MPL budget dilemma (sorry for the length):
[Background] The seemingly dire status of the city budget was readily apparent in 2000, although not much was being done about it; the markets were in turmoil at the time of the library referendum and the ripples were beginning to roll through the economy. Barret Lane had a telling piece in the STrib on Dec. 12th, 2000, warning of the ballooning cash deficit at City Hall; and, other City Council members dismissed his projections as inaccurate. By the time of the '01 elections, more folks were listening and the Mayor and most of the City Council were turned out to pasture. Our newly elected leaders vowed to straighten out the budget and rein in the subsidies going to big projects downtown. State tax laws were undergoing changes and the recession was ripping through the economy; businesses were closing and unemployment was climbing. Federal and state tax revenues were falling dramatically. The state legislature, both sides of the isle, did nothing to fix the deficit-ridden budget during the 2002 session-- playing party politics right up to the fall elections. The budget dilemma grew worse! Workers were losing jobs and retirement savings were disappearing. Interest rates were dropping; people of modest means on fixed income were struggling; the housing market was booming. The city was faced with new fiscal challenges associated with state tax law changes, and city leaders adopted a new workout plan to resolve the budget dilemma (the '8% solution'). Community and economic development, jobs and affordable housing were the priority areas to be addressed-- ala McKinsey and CPED-- during the summer of 2002. After the fall elections, rumors began to circulate over anticipated state budget cuts. Then shortfalls in city pension plans made the news; and bonds were issued (but the bulk of the problem remains). And then all hell broke loose at the state and local level-- to the tune of about a $5-6 BILLION state shortfall (as of this writing; and, all on top of the TIF changes, and school budget problems facing municipal governments across the state). [The Library] Flash to Mar.4th, and we read Rochelle Olson's STrib article describing how the 'Library may be shelved' and that Minneapolis officials are now talking about delaying the new downtown library until the library's operational budget quagmire is resolved. And, naturally, the shortfall is conveniently blamed on the Republicans at the state. Yes, there's plenty of blame and political cover to go around this year, especially here in Mpls. where, it is said, all the non-metro politicos hate us and are out to get us. At the same time, all the divisiveness does not solve our problems. I didn't vote for the library referendum in the fall of 2000. But, the majority of city voters did. I felt the public was misled in the referendum. The referendum only accounted for two-thirds of the incremental capital and operating costs associated with building and operating the new downtown library and making improvements to and operating the community libraries. MPL leaders had vague capital expansion plans and included no strategy on how to pay the increased operating costs for expanded facilities and related services. In other words, the library budget was not structurally balanced, to include both operating and capital requirements in the future-- and this was in 2000. Add the city's 8% solution (which restricted the MPL from raising taxes to cover higher operating costs) and the proposed LGA cuts from the state, and a bad situation got dramatically worse, fast! Still, local library leadership should not be held completely harmless in these budget debates. Fiscal transparency and accountability by leaders remain sound goals. Understandably, city leaders are now much more concerned about the prospect of adding more debt (issuing the library bonds approved by referendum) to the city budget. They are justifiably more concerned than ever over the operating costs of city government; and the sources and amounts of revenue to cover said operating costs as well as debt service. Credit agencies are also watching, and any downgrade will result in higher borrowing costs. Our city leaders are posing good questions as they wrestle with the most dramatic budget shortfalls the city has ever encountered. And, all options should be on the table. But, we must also remember that city voters did approve a capital spending referendum that included building a new downtown library, while renovating neighborhood libraries across the city. Delaying construction will only serve to increase the cost for all projects. If delayed, taxpayers would get much less than they bargained for when they approved the referendum in 2000, as construction costs increase over each month of delay. And the operating shortfall has now become VERY significant. What to do? Close libraries, delay construction, reduce services and operating hours? Typical solutions that have been used during hard times past. But, is that what we want to pursue this time around? [Potential Solutions] This library dilemma requires a creative set of solutions that benefits taxpayers and library users, rather than penalizing them-- the proverbial win-win deal. Perhaps the city could build the new downtown library, sell it to another public or private entity, then lease it back-- in effect removing the debt from the city budget and using the proceeds to cover operating costs (including the lease payments). City leaders would have to anticipate such a strategy when planning the bond issue, so as to make it all possible-- avoiding problems like we encountered with Target Center and the restrictions (on use of outside/private money) associated with the type of city bonds issued for the project. Another win-win solution might involve Minneapolis and Hennepin County officials working together in some fashion. Perhaps the city and county could negotiate a joint-venture partnership, whereby the city would retain capital and operating responsibility for all of the city's neighborhood libraries, while the joint-venture would share responsibility for building, owning and operating the new downtown Central Library. Currently city residents aren't taxed for the county library system and county residents don't pay for the city library system. By working together, in this joint-venture partnership, the new downtown library could be built on schedule using the $122.5 million in city referendum funds. Several scenarios are possible. City taxpayers could in essence join the county library system-- helping fund the county library system, and the county library system could operate the new downtown library. Granted, such a solution might necessitate operational changes in terms of integrating information systems and labor contracts, but the net result should be an improved, more cost-effective library system for both city and county residents-- a solution that benefits taxpayers and library users. Many details would need to be negotiated. Under this scenario, perhaps the new Director of the Minneapolis library system and one or two of the Minneapolis Public Library Board members could sit on the Hennepin County Library Board. The size of the Minneapolis Public Library Board could even be reduced-- placing emphasis on neighborhood library policy, management and budgets. At some point, perhaps the entire Minneapolis Public Library Board of Trustees could be eliminated, and their responsibility for neighborhood libraries transferred to city government-- with the Library Director playing a more prominent role. Appropriate city representation on the County Library Board could be formally assured. Perhaps the downtown library would just become part of the Hennepin County Library system, with the city owning and operating the neighborhood libraries? Improved library services at lower overall cost sounds like a win-win deal to me. What are the posibilities? The point is-- city residents said they were willing to be taxed to have a new downtown library. It doesn't really matter who owns the facility. Lots of options should be thrown on the table for discussion. The budget cuts being proposed at the state and local level require new visions of how to better serve taxpayers and residents in a more cost-effective manner. These budget cuts present us with new opportunities to move in new directions. Old business models often need review, revision, and rewrite; with better coordination, less duplication and less costly service delivery being the goal. Better coordination of Minneapolis and Hennepin County library systems just might be a step in the right direction. Maybe there are merger opportunities, at least where the Central Library is concerned? Let's get all the cards on the table. Michael Hohmann Linden Hills ~~~~~~~~~~~~~~~~~~~~~~~~~ For market research, financial analysis, business planning, and project management... www.mahohmannbizplans.com ~~~~~~~~~~~~~~~~~~~~~~~~~ TEMPORARY REMINDER: 1. Send all posts in plain-text format. 2. 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