Less than four weeks after celebrating the construction of the new library, city officials are stumbling over the expense of running the much larger facility.
The City Council’s Finance and Intergovernmental Relations Committee couldn’t get past the H. Leslie Perry Memorial Library’s budget during a brainstorming session Tuesday night on how to make the city’s finances work when the preliminary numbers show expenses up and revenues flat.
The library has long been a thorn in City Manager Eric Williams’ financial side because of an understanding that Henderson and Vance County will contribute equal amounts to the budget.
That arrangement ignores two important facts: Henderson voters decades ago passed a referendum to dedicate up to 3 cents on the property tax to the Perry Library, and cities typically pay a much smaller percentage of county library expenses.
“When you look at libraries across the state of North Carolina, there are three kinds: county libraries, city libraries and regional libraries,” Williams said, noting that most are county libraries. “Our library is well, well above average for the contribution of a city to a county library. It’s a fact. The facts are there.”
Another fact is that the city actually has paid more than the county to operate the library for two consecutive years.
Williams has proposed funding the library at the 3-cent level in past years, only to see the council overrule him by nominally spending money other than property taxes on the library. In the current budget year, the library is getting $250,000 from the city and less from the county.
But that was the amount to operate the 12,000-square-foot, one-story facility on Rose Avenue. The new building on Breckenridge Street will provide 40,000 square feet of space over two floors, and library director Jeanne Fox has said the operational expenses will roughly double.
“You will anger thousands of people if you go up on their water bill and they perceive it as being for library operations,” council member Elissa Yount said Tuesday night. She said the council needs to decide how much Henderson can afford to spend on library operations, and “that’s that.”
For the coming fiscal year, Fox expects to be in new building for four months, March through June, so she asked for an additional $98,000 from the city, or about $348,000 total. The request will be around $500,000 in the year that starts July 1, 2006.
“That library budget is busting us,” Yount said. “We’ve got to make the hard decisions. I am sorry if we’re building a library that we can’t afford to run it and maybe can only afford to run it five days per week.”
Williams said operational issues involve the city, county, library board and state. “The foundation, to my knowledge, has not addressed, nor have they been asked to address, how you go about operating the new library once it’s built.”
Under the land contract between the Embassy Square Foundation and Henderson, the city will own the library once the foundation finishes construction and returns the land and any improvements, such as new buildings, to the city. The city and county jointly own the current facility.
Yount suggested that the city’s ownership of, investment in and maintenance of the new building could count for its contribution to the library’s annual expenses, and the county, which employs the staff, could pay all of the local funding for operations — soon to be $1 million per year.
“Ownership — that’s a twist I hadn’t even thought about,” Williams said.
He said the library budget overshadows other problems he must confront in Henderson. “For one reason or another, when we talk about cutting funding for the library, no one wants to talk about how we’re stepping up to the plate far and away more than virtually any other city in the state of North Carolina paying for a county library.”
Yount held out the hope that the library’s trustees, through their own nonprofit foundation, will be able to raise money for library operations, but FAIR Chairman Bernard Alston has his doubts while the Embassy foundation is pressing for donations in this area for the planned performing arts center.
“Everybody wants to furnish it nicely and run it nicely,” Yount said. “It may be we can only afford to run it four days instead of seven.”
Council member Mike Rainey said the city certainly will have to pick up the maintenance bills because the city will be the owner.
“We need that library, don’t we? … That’s where the work is going to come from us,” council member Mary Emma Evans said. “I hope we can catch the vision to promote the educational future of Vance County.
We need to come up with way to promote that library and keep it running.”
Council member Ranger Wilkerson said the city’s support isn’t in question; the source of money is.
“It’s a challenge, but we can make it work if we put our heads together,” Evans said. “Can’t we cut back in other areas to find the money we need to come up with?”
Wilkerson, a veteran of decades of city budgets, first as fire chief and now as a council member, said council members are playing a familiar tune in talking tough about the library. But he’s sure library critics will back down.
“You all know that you’re going to support that library,” Wilkerson said. “A brand-new facility sitting there like that, and you’re going to halfway support it? You know you’re not.”
Nevertheless, Williams said he will arrange a meeting between library officials and the council as soon as possible.
Williams and the council members (only John Wester was absent) did consider some other ideas Tuesday:
* The city manager said Henderson should ask Vance County to share more than 15 percent of the profits from the county’s two ABC liquor stores.
“We certainly cam make a case for it,” Williams said. Alston advised benchmarking the amount Henderson gets compared with other cities in their dealings with county ABC revenues.
Unfortunately for the city, it appears to have little leverage in its ABC request from the county.
* Yount said the city should get a bigger payment from the state for maintenance of state roads in the city, or the city should leave the street maintenance to the state. Alston said Yount has a good idea, but “I don
T know if we can do it.”
* Yount suggested dumping the city’s Washington lobbying firm, The Ferguson Group, to save $78,000. She said city leaders are “strong enough and smart enough” to do the job in Washington without the lobbyists, who are credited with helping bring $3 million in federal money to the Henderson area.
Alston and Rainey didn’t like that idea.
* The city is bidding out the health insurance for Henderson employees. “I don’t think we have any choice but to corral the insurance costs somehow,” Alston said.
Assistant City Manager Mark Warren said Blue Cross and Blue Shield quoted the city a premium increase of 21.6 percent for the coverage city employees get now. Working with Blue Cross and at least three other insurance companies, Henderson also is pricing policies with deductibles up to $1,000 and options such as higher drug co-payments. All of the options will be placed in a spreadsheet for easy comparison.
Rainey offered another approach: Pay a flat amount for each employee’s health insurance, and give the employees the option through the group to add features or dependents at the employees’ expense, not the city’s.
* Aggressively sell surplus real estate to produce money that can be poured into the fund balance.
* Finance Director Taig Neal said he is slashing all of the budget requests the city received. “If they can cut 10 more percent out of the ones we’ve cut so far,” Neal said, “they’re doing something.”
The budget saga is due to continue next week with a FAIR session Tuesday.