By Stuart R. Wahlin
Rockford Public Library officials proclaimed as a success the purchase and renovation of the system’s 23,000-square-foot East Branch facility at 6685 E. State St., formerly Barnes & Noble, but the real cost of that move goes well beyond the $4.7 million price tag for the project. Just ask library employees.
After months of worrisome uncertainty, approximately 30 library workers—half union employees and half non-represented—are receiving their walking papers the week of Jan. 11.
A deal between the library’s Board of Trustees and the union decided that pink slips would be issued on the basis of employees’ most recent performance reviews, with seniority taken into account as a tie-breaker.
Top-heavy administrative positions do not appear to have been in jeopardy, however.
Based on the criteria agreed to by the union, Frank Novak, executive director, and Assistant Director Fayrene Muhammad determined which employees were to be let go. Neither the performances of the library brass nor trustees appointed by Rockford Mayor Larry Morrissey (I) and the city council were similarly evaluated in the process, however. Perhaps all of the above deserve a closer look.
30 layoffs in exchange for east branch?
To anyone who bothered to see it coming, the recession was well under way and should have been evident to trustees when the library took possession of the former Barnes & Noble in 2008, which makes one question the wisdom of the endeavor to replace the Alpine Road branch at that time. It would prove to be a problematic move on several levels.
Barnes & Noble had found a new home in CherryVale Mall, reportedly because patrons were doing too much reading and not enough buying at the East State Street outlet. Complete with Starbuck’s coffee in its CherryVale store, B&N squeezed out longtime local favorite caffeinating-hole Gloria Jean’s after 15 years as a staple in the mall. B&N’s lease agreement required that no competitors be visible from their new store.
According to county records, Barnes & Noble was generating more than $100,000 in property taxes annually at its former East State Street locale. But after a number of closed-door meetings, library trustees opted to purchase the property, whereby the prime real estate would be forever removed from the tax rolls.
The library paid $3.175 million for the building, which had a fair market value of $2,933,976 for 2007, when the purchase agreement was inked.
Lately, we’re seeing an awful lot of local governments buying property that should remain on the private market, and this has to stop.
Additionally, the Board of Trustees didn’t like the idea of letting voters have a say about the east branch legacy by way of a referendum.
Rockford Public Library Community Relations Officer Emily Hartzog explained: “We always felt that it was more fiscally responsible to work within our budget than having to go to taxpayers and ask for more money. We had some debt service that was about to be completely paid off, and so we’d already made that part of our operating budget.”
Comfortable with perpetual debt, trustees plodded ahead with the ambitious plan.
To afford the purchase and renovation, the Rockford City Council issued more than $3 million in bonds on the library’s behalf in September 2007. According to Hartzog, the library pays approximately $250,000 annually in debt service.
The rest of the cost was absorbed through $632,698 in private donations, although officials had hoped to secure $1 million. Nearly $800,000 came from the library’s operating reserves for the $4.7 million project.
“That’s why organizations create reserves like that,” Hartzog said.
On the other hand, some might argue the $800,000 would have come in handy as a rainy-day fund that could have kept library staffers employed. Although hindsight is 20/20, the Board of Trustees must have been blind not to see the economic storm looming on the horizon.
Additionally, library officials had hoped to sell naming rights. Notably, First Rockford Group’s Sunil Puri expressed interest, but balked at the $500,000 asking price.
As for whether the sale of vanity rights is still a possibility, Hartzog explained, “We’re not actively pursuing naming rights at this time, but obviously, if someone came forward with an interest in naming the library, we would certainly entertain those conversations.”
Asked what the cost of operating the new east branch is, versus its Alpine Road predecessor of one-third the size, Hartzog indicated: “That’s a difficult number for us to provide. That would take quite a bit of number-crunching. But again, when we were looking at this project, we looked at what our operating budget was, what our capabilities were, how we could reorganize within the organization, and it was all perfectly feasible and well within our operating budget at the time. Of course, in 2007, nobody could have predicted 2010.”
Library leaders patted themselves on the back for acquiring and renovating the former Barnes & Noble without a tax increase or referendum, but the layoffs in 2010 are nothing to be proud of, despite assertions from administrators who say the cuts are completely unrelated to the east branch project.
Morrissey pulls the rug from under library
In July, Mayor Morrissey said he would pull the plug on the city’s $856,897 annual subsidization of the library for pensions and other costs. He blamed unfunded pension mandates by the state for the unfortunate turn of events.
Hatzog, however, took exception to the word “subsidy.”
“If we’re being fair, Rockford Public Library employees are city employees,” she noted. “We’re not an outside organization. We’re bound by the same pension regulations as the city. We’re bound by the decisions that are made at the state level regarding our pension funds, and this is an expense that has to be paid, and has historically been paid through the city. So, I think in fairness, it’s just a redirection of the way things are done. And we understand that the city’s in a difficult position, but that was rather unprecedented in our history.”
Asked for how long the city and library had partnered in this manner, Hartzog responded: “We tried looking into that, and as far as anybody could remember, it was as far back as they could recall. …The way we had funding handled through the city, as far as special funds—the unemployment, the workman’s comp and the pension handled through the city—it was not an uncommon practice in the State of Illinois.”
Emily Klonicki, a program coordinator for the library, rightfully refuted Morrissey’s pension excuse at a subsequent council meeting.
“Don’t insult me and my fellow citizens by telling us that police and fire pensions alone choke out our budget in Rockford at the expense of my services,” she argued. “Is it so much to ask that we citizens of Rockford, who work hard and pay taxes, can expect a decent quality of service in return? It’s an outrage that I even have to be here defending the library, because we all know what it is to our community.”
The City of Rockford, of course, has its own budget problems to deal with, but $856,897 seems like chump change when compared to the millions upon millions it spends on feel-good projects far less important than the invaluable programs and services made possible by the library’s talented frontline staff.
Having to absorb the sudden loss of the city’s support, combined with declining revenues and higher expenses, the library layoffs came as a result of an anticipated $1.7 million shortfall for 2010.
In November, the library’s Board of Trustees hammered out a one-year deal whereby wages would be frozen for union and non-union employees. In a 45-4 vote, the union also agreed to 14-16 layoffs of its members based on seniority and performance. Originally, 24 union staffers were on the chopping block for the layoffs, so it’s not surprising that the second deal was an easier pill for the union to swallow.
The job cuts are expected to save $1 million. Additionally, fees and fines were raised, and hours were reduced as a means to help close the projected budget gap.
All library branches will be closed for reorganization Jan. 14 and will re-open on a rolling basis under the new hours, Hartzog said.
Voters never given a choice
The library is its own taxing district whose levy rate has been capped at 32 cents—30 cents for operations and 2 cents for maintenance—since 1984.
Aside from the dubious decision to move ahead with the east branch project, other taxing bodies have much to learn from the library’s ability to live within its means, and without an increase for two-and-a-half decades.
In September, Lewis Lemon Global Studies Academy teacher Denise Cacciapaglia pleaded with aldermen to consider a more moderate solution to the drastic cuts.
“If we just increase that [levy] 2 or 3 cents, it could help offset the costs of those employee pensions,” she argued.
As noted by library supporter Rachel León at a Rockford city council meeting in November, the cuts could have been averted by letting voters decide whether the libraries are deserving of their first raise in 25 years.
“You owe it to the citizens of Rockford to at least vote on whether they are willing to pay an increase to the library portion of the tax revenue,” she told aldermen, who had just voted to hike water and garbage rates without public approval. “The library is operating in the 21st century on a budget fit for the 1980s.”
According to City Finance Director Andres Sammul, voters would need to pass a referendum to increase the library’s taxing authority. Library trustees, however, did not pursue a referendum as a possible alternative to the cuts.
“That was obviously something that the board discussed,” Hartzog acknowledged. “But realistically, it just wasn’t something that they felt they could achieve, especially given the current economic climate in our community, given the stress on not only the taxpayers, but other organizations throughout our community. It just wasn’t feasible.
“The money, the time and the effort that goes into a successful capital campaign, obviously, we just didn’t have,” she added. “And you also have to remember that there’s a one-and-a-half to two-year timeline when you do a referendum, so we’d still be looking at a shortfall in 2010.”
This is all the more reason Mayor Morrissey and the City Council were negligent in providing such short notice before walking away from the city’s longtime partnership with and commitment to the library system. Shame on them.
The voters should have had a chance to decide whether the library system is worth another few pennies before the city forced 30 more municipal layoffs. Meantime, the city could have granted a brief reprieve before pulling its funding.
Given the choice among MetroCentre bailouts, removal of the downtown pedestrian mall and other pet projects versus a healthy library system, voters undoubtedly would have chosen the latter.
Referendum champion silent
Novak took the reins in January 2006 with a salary of $95,000 after the resignation of former director Karen Van Drie, who was accused of misusing library funds and allegedly not meeting expectations. When she was hired in 2002, Novak had been the board’s second choice.
Selected for his track record of selling voters on referenda, Novak’s top priority from the beginning was to make the new east branch facility a reality.
According to a 2005 report in the daily: “His legal background and experience with library referenda could come in handy if the Library Board pursues a tax referendum next year to pay for the expansion plan. …The Oregon Public Library District tripled the territory it serves via tax and annexation referenda and more than doubled its budget while Novak served as its director from 1994 to 1999.”
According to the same report, Novak had no library experience prior to his work in Ogle County. The Board of Trustees for Oregon’s libraries, by way of taxpayers, footed the bill for Novak to obtain a master’s degree in library science.
In 1999, Novak became the director of Freeport’s library system, during which time he helped pass a $2 million referendum for a new downtown library facility, which opened in 2003.
His vote-getting skills have not been put to the test in Rockford, however, which is unfortunate. The Board of Trustees should have given him that chance.
Although Novak and fellow administrators were contacted for comment, questions were only fielded by Hartzog.
From the Jan. 13-19, 2010 issue.