PVLD Director's Blog

Start of a new fiscal year - rough waters ahead

Today is the start of a new fiscal year at PVLD, and it looks like it will be the most challenging of my 5 1/2 year career at PVLD so far.  We head into the fiscal year with a budget that is barely balanced, and with some known risks that could compromise even that outcome.

The 09/10 budget approved by the Board of Trustees reflects a net excess of only $31,000 - which provides a "margin of error" of less than 0.5% of our $6.58 million revenues - and that net excess was only achieved after substantial reductions in the budget for library books and other materials, elimination of a number of online databases, reductions to library open hours, elimination of contract services, deferral of a number of capital maintenance projects, and many other cost-cutting measures. 

The budget also relies on the Friends of the Library to double their level of support compared to the 08/09 fiscal year (the Friends will be providing about $300,000 of funding this year) and on using donations to the Library District accumulated over many years to fund important strategic plan initiatives and capital projects.  We do not meet our emergency reserve policy, and there is a significant risk that higher than expected property tax defaults for the 08/09 fiscal year (which won't be known until August) could put us into a deficit situation. 

The budget also does not make any provision for the State "borrowing" local property tax revenues, which could have a devastating effect.  Unfortunately, the longer the State budget impasse drags on the more likely it is that they will borrow our property tax revenues and we were advised today that this is again "on the table" for consideration.  This could mean the loss of $450,000 in revenue this fiscal year.

The projection for 10/11 is even worse - it already shows a projected deficit of $179,000 in the operating budget and again does not include the impact of any borrowing of local property tax revenues - and if that doesn't happen this year there is a good chance it will happen next year.  We also are short over $300,000 for important capital maintenance projects, and there is a limit to how much we can defer without compromising long-term facilities and technology needs or putting PVLD at risk of expensive emergency repairs.

The 09/10 budget also assumes the Friends of the Library will be able to sustain their 09/10 level of support...something that becomes increasingly challenging in the face of general economic conditions.

And of course we have no idea when the general economic recovery will kick in, or how long it will take for the property tax revenues that are our primary revenue stream to rebound.

Definitely rough waters to navigate! 

On the positive side we have a terrific staff and a wonderful group of volunteers who continue to try to do as much as they can to serve the community within the limits of our reduced resources.  I do worry about staff burnout, though, and will be working with the Department Managers to see what projects or activities we can eliminate or defer while still focusing on the core goals in our Strategic Plan.  A lot of "nice to do" things will almost certainly need to be dropped.

Rough waters?  For sure.  Will we make it through them?  PVLD is blessed in terms of staff, volunteers, Friends, and community support, and as a result we are much better positioned than many libraries to weather this storm..it just won't be much fun at times.  My personal goal is to not get swept into the water, to do my best to balance the needs of all of the people who contribute to making PVLD such a wonderful library, and to keep my eye on the long-term...and to remember, as one of our employees keeps reminding me, this too shall pass.

Libraries are an essential part of a community's infrastructure

This year I am Chair of the California Library Association's Legislative Committee, which means I am getting an up-close look at how the perilous state of the economy and of the California budget are threatening library services. 

Libraries across the state are reporting deep cuts to their budgets resulting in closed branches, reduced hours, elimination of online resources, book budgets that are being reduced by 50% or more, layoffs, furloughs, and hiring freezes.  At the same time we are seeing extraordinary growth in demand for library services, especially in communities that have been hardest hit by the recession where the public library may be the only place people can come for free access to computers to prepare resumes and submit job applications.  I can hear the strain in the voices of my colleagues as they try to balance these competing forces and still provide the best possible service to their communities.

All too often it feels like we are in competition with other public services, with the implication being that in a community's hierarchy of needs libraries are somehow less essential than "public safety" typically defined as fire and police. 

People forget, and librarians find it difficult to articulate, that libraries play a unique role in a community in that they both play a role in public safety (by providing safe spaces and activities for people of all ages, providing access to medical and other basic information to support basic well-being, helping people find jobs, enhance their skills and otherwise sustain financial security)  and help fulfill needs that are higher up on Maslow's hierarchy as an integral part of the educational infrastructure and a center for lifelong learning.

I've been reading a delightful little book called Dewey: the small town library cat who touched the world ,which is bringing this home to me.  I thought it was going to be a sweet story about a cat, and it is, but it's also about the important role played by the library in a struggling farming community in Iowa during the farm crisis of the early 1980s.  It's also a terrific read!

In yet another example of the synchronicity that the Internet fosters, this morning I came across this blog post by Stephen Abram.  He hits the nail on the head when he writes

"I and most people would pay a hefty fee to be guaranteed that I and my family would never have to visit or be visited by the police, fire crews, hospital staff, or ambulances. The only thing on that list that I pay taxes for that I willingly and gladly choose to go to often is the public library.

And that's different in a special way. All the others are awesome and Lord forbid they not be there or funded properly. But the world will be a lesser place and life in our communities damaged forever, if our public libraries are sacrificed at the altar of budgeting."

And like Stephen I was thrilled to see this video from Minnesota (shared on the always interesting The M Word blog about marketing for libraries), which puts libraries alongside fire and police as an essential local service

These are tough times, and I know that cuts in basic services are inevitable.  My hope, and my goal, is that we can help decision-makers understand that libraries are in fact basic services and that when cuts need to be made libraries are no less important to the safety and well-being of our communities than police and fire, schools, and hospitals.

Hats off to the people of Minnesota for expressing it so well.

Reason for hope

I'm taking a couple of days off and turning the Memorial Day holiday into a five-day weekend, with a goal of getting some stuff done around the house, and also tuning out work and recharging my batteries.  My preoccupation with the budget challenges faced by PVLD has not left me with much time or energy to write posts that are really thought-provoking, and I'm hoping this will change when I get back next week.

Despite all of the budget issues, I'm heading off with a sense of optimism...not because the financial picture is improving but because of how the staff here at PVLD are responding.  Everyone is understandably anxious about how the budget cuts will affect them personally, and everyone is aware that there is likely to be some pain, but despite that they remain focused on providing outstanding service to our community.

The number and quality of special programs and events at all of our libraries continues to grow, the Librarians have planned outstanding Summer Reading activities for all ages, the staff who support the Passport Service are handling a big jump in volume in addition to their normal duties, the Circulation staff have re-engineered their  work processes so that they have cut the time it takes to get a book back on the shelf after check-in in half, the Facilities staff has brought in-house virtually all of the maintenance activities we used to contract out and dealt with all of the extra work associated with the many new programs and events...I could go on and on.

Today we had a meeting to brainstorm about our upcoming TEDxPVLD event and 15 enthusiastic people came to share ideas and help make this event happen...and that doesn't count the people who are eager to help but couldn't make today's meeting.  These are staff members who are already stretched thin with their daily workloads but are volunteering to take the time to participate.

I've also been encouraged by the suggestions from employees about how we can cut costs and increase revenue.  People have been willing to put forward ideas that mean more work or even less pay...and I am very aware how hard they are already working and how challenging it is to live in our area on our less-than-lavish salaries.

I've said it before and I'll keep saying it...they are a truly amazing group!  That's why my stomach is in knots at the thought of the inevitable hardship that this budget crisis will impose, and why I will do everything in my power to make laying off employees a truly last resort.  But it's also why I am confident that with everyone pulling together we will make it through this crisis.

To the PVLD staff - you are incredible.  You are making it possible for me to take these few days off with a sense of hope rather than panic....thank you!

Tough times, tough choices

The budget situation for the State of California, and by extension for local governments like PVLD is grim and getting grimmer.  We are faced with continued declines in assessed property values, resulting in flattening or even declining property tax revenues, as well as the near certainty that the State will "borrow" local property tax revenues.

The PVLD staff have already trimmed nearly 10% from our 09/10 budget, and it now looks like we need to cut another 10%.  We've already cut our budget for online databases and for library materials, left several vacant positions unfilled, reduced the budget for staff training, and tightened our belts in a number of other areas...and now it looks like we need to cut as much as an additional $700,000.

My job is to work with staff and the Board of Trustees to come up with a budget that does the least harm to the greatest number of stakeholdersin the short-term while protecting the health and vitality of the library district in the long term.

I've been having some sleepless nights a I wrestle with the tough choices that need to be made.  I don't see any way of balancing the budget without cuts to library open hours; further reductions to the budget for books and other library materials; and higher overdue, DVD rental, meeting room rental, and other fees.  

This will result in reduced services and higher "out of pocket" costs for library users just when they need us most, as evidenced by the rapid growth in library use.  This fiscal year-to-date (July 08 through April 09) PVLD's door count is up 20%, our circulation of library books and other materials is up 16%, and attendance at our programs and events is up 12% compared to the same period last year.

It also will result in hardship for our staff as we will need to freeze compensation; and consider unpaid furloughs to align staffing costs with reduced library open hours; and continue to freeze non-essential vacant positions at the same time that the staff is working harder than ever to keep up with the demand for services, we are asking them to do more to support revenue-generating activities such as the Passport Service, and we are already short-staffed in a number of areas.

As a leader one of my goals (actually I see it as a duty!) is to do all of this without losing community support for the library or hurting staff morale.  This is what keeps me up at night.

My husband manages the Manhattan Beach Library, which is one of the 84 libraries in the Los Angeles County Library System so he is a fairly small cog in a very large wheel.  Not having much influence can be frustrating and most of the time I wouldn't trade my job for his, but this morning we were talking about the budget challenges and he said something like "I guess I'll wait and see what comes down from Library Headquarters, since there's nothing I can do about the situation".  At that moment not being the one who has to make the hard choices seemed pretty good to me! 

State threatens to take local property taxes - impact on library services would be severe

I just received the following message from the California Library Association, and a similar one from the League of California Cities.  Once again the State Legislature is threatening to take local property tax revenues in order to solve its budget crisis.  Property taxes make up about 88% of PVLD's revenues(the rest comes from library fees (e.g. overdue fees, meeting room rental fees), entrepreneurial activities such as our Passport and Notary services, a very small amount of State funding (less than 1% of our budget) and money raised by the Peninsula Friends of the Library.  Flattening property tax revenues have already resulted in significant cuts to our budget for library books and online databases, a hiring freeze, and other budget cuts as well as asking the Friends of the Library to double their level of support.  The loss of a further 8% of our property tax revenues (which would be about $500,000) would be devastating and would mean further slashing of the book budget and cuts to library hours and services.  And these cuts would come at a time when demand for library services is higher than ever as people turn to the library for financial planning and budgeting resources, job search resources, free access to the Internet and much more. 

YOU CAN HELP!  Please contact the Legislators listed at the bottom of the following message and tell them that the proposal to borrow local property tax revenues would be devastating not only to the library but to other local services such as police and fire.  THANK YOU!!!

GOVERNOR’S ADMINISTRATION WARNS:  THE STATE MAY BORROW $2 BILLION FROM LOCAL GOVERNMENTS IF MAY 19^TH BALLOT MEASURES FAIL

 

 

Yesterday the State Department of Finance informed several local government organizations that, with the possibility that the May 19^th ballot initiatives may not be successful, one of the options to address the potential Budget shortfall would be to borrow approximately $2 billion in property taxes from local governments. 

 

The background paper provided during the briefing by the Department of Finance states: 

 

“The constitution allows that up to 8% of local governments’ property tax revenues can be borrowed by the state and repaid within three budget years with interest.  The amount that can be borrowed is determined by the amount of property taxes received by cities, counties, and special districts in the preceding year.  Borrowing from local government in the 2009-10 fiscal year would provide $2.006 billion in solutions.

 

Local governments could borrow against the state’s constitutional obligation to repay, thereby mitigating the impact of this reduction.  However, in the current economic landscape, local governments are not easily finding available short term financing and could face difficulties borrowing these funds from the market.  If they borrow, local government will incur substantial borrowing costs.” 

 

The Department of Finance also acknowledges that there would be varying affects on local governments as it “will, in part, depend on the ability of local government to obtain borrowing from the market.  This reduction could result in cuts to locally funded services such as police and fire, waste collection, road maintenance, libraries and other services.”

 

As you will recall, Proposition 1A in 2004, provided certain protections for cities, counties, and special districts against future raids of their property taxes, for the purpose of balancing the state Budget.  However, contained in Proposition 1A was a caveat, which allows the state, beginning in 2008-09, to “suspend” the prohibition on taking local property taxes if the Governor proclaims a “significant State fiscal hardship” and gets the Legislature to agree by a 2/3rds vote.   If you are interested, the legislation spelling out the terms of Proposition 1A is contained in SCA 4 (2004) and SB 1096 – a Budget trailer bill from 2004.

 

Last year, during the very difficult and protracted Budget deliberations, there was an ongoing threat that the Budget deal would include borrowing property taxes from cities, counties, and special districts.  Thanks to opposition from affected groups, the proposal was not included in the final Budget agreement.  As you may be reading, and it is particularly indicative in early polling data, there is a strong likelihood that several, if not all of the ballot measures will fail on May 19^th,  resulting in a $6 billion loss in revenue, primarily from the loss of $5 billion in lottery securitization funds (Proposition 1C).  Coupled with the $8 billion shortfall already projected by the Legislative Analyst’s Office, there will be an immediate $14 billion hole in the state Budget.   Some Republican members of the legislature have stressed that “taxes will not be an option this time around” and thus, the legislature will be looking to solutions such as cuts, borrowing, and increased fees.  Please take a moment today to write the Governor and the four legislative leaders, as well as your own Senator and Assemblymember(s) to encourage their opposition to any proposal that would borrow property taxes from cities, counties, and special districts.  In your letters, please indicate how your Budgets are already stretched thin, and that you could not endure a deep and significant cut, such as the one the Governor’s Department of Finance is suggesting.

 

The Honorable

Arnold

Schwarzenegger

Governor, State of

California

State Capitol

Sacramento

,

CA

.  95814

 

The Honorable Darrell Steinberg

Senate President pro Tempore

Room 205

State Capitol

Sacramento

,

CA

.  95814

 

The Honorable Dennis Hollingsworth

Senate Republican Leader

Room 305

State Capitol

Sacramento

,

CA

.  95814

 

The Honorable Karen Bass

Speaker of the

California

Assembly

Room 219

State Capitol

Sacramento

,

CA

.  95814

 

The Honorable Mike Villines

Assembly Republican Leader

Room 3104

State Capitol

Sacramento

,

CA

.  95814

Smarter Giving - anyone can be a philanthropist

PVLD's proeprty tax revenue base only covers about 88% of our operating expenses, and the funds raised by the Peninsula Friends of the Library enable us to sustain a level of library service well beyond what we could achieve with tax revenues alone.

Fundraising in a community like Palos Verdes can be challenging given the large number of local non-profit organizations seeking funding (I think I counted 24 of them at the inaugural Non-Profit Roundtable hosted by the Chamber of Commerce this week!)....and these are just the very local organizations.  A great deal of financial support also flows off the Peninsula to alma maters, and to regional and national organizations.

Last year several non-profit organizations dedicated to enhancing the quality of life in our community (the Peninsula Friends of the Library, the Peninsula Education Foundation, the Palos Verdes Art Center, the Palos Verdes Land Conservancy, H.E.L.P., Caring House, and the Norris Center for Performing Arts) came together not to solicit funds, but to educate community members about how to make the most effective use of their donated time and dollars.

The speaker was Ed Long, current Library Trustee and co-founder of the nationally recognized H.E.L.P. organization that provides low-cost legal and financial advice to older adults and their families.  Ed is extremely knowledgeable on the topic of how to be a "smarter giver" and a terrific speaker to boot.

Over 50 people attended the first sessions at the Peninsula Center Library last November, and the feedback was terrific.

Next week the group is sponsoring another Smarter Giving seminar on Wednesday, May 6 at  4:00PM at Ridgecrest Intermediate School in Rancho Palos Verdes.  As an added bonus, 35 lucky participants will receive a copy of the book Inspired Philanthropy to help them plan their future giving.

No sales pitches, no solicitations...just a wealth of information to help you make meaningful contributions to worthy causes, even in these difficult times! 

Budget challenges

We are putting the finishing touches on the PVLD "mid-year" budget, which will be presented to the Board of Trustees next week.  PVLD operates on a July 1-June 30 fiscal year, and each January we take a look at our actual revenues and expenses for the first half of the year and then make adjustments to our budget to reflect any circumstances that were unforeseen when the budget was approved the previous spring.  We also update our forecast for the next fiscal year to give us a more realistic sense of what our financial future looks like.

The good news is that despite some pluses and minuses in individual budget line items, we are forecasting that we will end the current fiscal year with a very slightly larger than anticipated surplus thanks to some great work by the staff to cut costs and to some unexpected grants and other income.  This will allow us to fund all necessary capital maintenance projects this year and next.

The bad news is that as we look to 2009/2010 we have cut back our forecast of anticipated property tax revenue and are facing inflationary cost increases in a number of areas.  The result is that we are currently facing a projected deficit of $124,000 in 09/10, will barely meet our minimum reserve policy, and will not have enough to fund necessary capital maintenance projects in 2010/2011.  And even if the economy and housing markets improve in the next year or so, the current decline in the stock market almost certainly means higher pension costs in 2011/2012 and beyond.

On the (somewhat) brighter side, coming up with $124,000 in additional revenues and/or cost savings for next year won't be easy, but it's less than 2% of our total budget...and we are much better off than many other organizations.

Recently I attended a meeting of about 25 Library Directors from the greater Los Angeles area, most of whom reported that they are being asked by their jurisdictions (unlike PVLD and Buena Park most public libraries are part of city or county government) to cut their budgets by anywhere from 5% to 15%....targets that are almost impossible to achieve without significant cuts to staff and services.

That was followed by a conversation last Friday with State Librarian Susan Hildreth, who was at work despite the fact that like other State employees she and all of the other State Library staff were technically on furlough and not being paid.

At lunchtime today I heard our local School Superintendent, Walker Williams, talk about the huge budget cuts the School District is facing in the current fiscal year, which have already resulted in the issuing of layoff notices to many of the non-classroom staff including all of the library and technology aides in the elementary schools, with many more layoffs to come.  

The grim news from the School District was followed by seeing  this notice on the Buena Park Library District blog  announcing reductions in employee pay and benefits this fiscal year.

My conclusion?  Based on what we know today we certainly have a challenge ahead of us, but it's not an insurmountable one.  This spring we're working on a new strategic plan, which will certainly include finding ways to raise revenues and making careful choices about how we spend our money...and knowing how creative our employees are I think we'll find a way to close the budget gap without significantly reducing services and without making employees bear the burden in their paychecks.

Of course if the State decides to "borrow" our property tax revenues as a way of solving their budget mess, or the impact of the stock market decline on our pension costs comes sooner than 2010/11, then the challenge will be much greater and all bets are off.  In the meantime we'll be doing verything we can to negotiate these very tricky waters.

Tough Times for Libraries in Tough Times

I've posted a few times about how busy libraries get when times get tough.  It seems that every blog posting and magazine article on saving money includes a reminder of all of the free resources that are available from your local public library.

A few days ago I posted about how use of our PVLD libraries has grown over the past year, and Tuesday evening NBC Nightly News ran this story about the challenges faced by libraries nationwide as we try to serve more people with tighter budgets - 

Things aren't as dire financially for PVLD as they are for some of the libraries featured in the story, but we still face some significant challenges. Local property taxes make up nearly 88% of our budget, and although the housing market on the Palos Verdes Peninsula has held up better than in most areas we still expect our revenues to be flat at best.  State funding typically makes up only 1% of our budget, but given the current fiscal crisis in Sacramento we will be lucky to see any of that money.  Revenues from our Passport Service have also declined as fewer people plan international travel, and falling interest rates mean we are generating much lower investment income.  Couple the revenue challenges with expenses that are rising due to both inflation and increased library use and it is going to be a challenging few years.

In this environment the support we receive from the community via the Peninsula Friends of the Library  is even more important than ever.  Without the support of the Friends the community would not enjoy our array of events and activities including the Summer Reading program, special events for kids and teens; free concerts, movies, and more.  We would also not be able to keep the Peninsula Center Library open on Sunday afternoons (and Sundays are our busiest days on a per hour basis), and could not have gotten the Annex off the ground. If having access to outstanding library services is important to you, consider joining or making a gift to the Friends!  

A gloomy future for California?

Yesterday I started my term as Chair of the California Library Association Legislative Committee with a meeting at which our lobbyists gave us an update on the truly dismal state of our California State budget and the apparent unwillingness of our elected leaders to put aside partisan differences and self-interest to deal with the profound issues that face the state (a small example - the Governor has called a special session of the legislature to deal with the budget, but many legislators are not in attendance because they are in places like China, Europe, and Maui on "study tours" funded by various special interest groups).

Today I was skimming through some blogs and came across this article from the American Magazine  (thank you Michael Wade of Execupundit for the link). 

As a fourth generation Californian whose family came to California in the very early 20th century because of the promise of economic prosperity, and as someone who went to public schools in the late 1960s and early 1970s when California's education system was among the best in the nation, I was saddened by the picture Joel Kotkin paints in the article. 

As someone who left California in 1975, moved back briefly in the mid-late 1980s, returned regularly to visit family, and now has returned for good I have witnessed firsthand the decline in California's physical, social, and educational infrastructure against a backdrop of my experiences living in other countries and other states that have managed to avoid the kind of profound change for the worse that California has experienced.

As a resident who cares about my community and my state; as a public servant committed to improving the quality of life in the communities I serve; as a Library Director who believes firmly in the value of libraries in enhancing the economic, educational, social, and cultural vitality of communities; and as someone deeply involved in advocating for libraries across the State I want to believe that we can do better than Mr. Kotkin predicts.

My hope is that in accordance with the old Chinese proverb, the current crisis will at long last stimulate fundamental change in the governance structures and processes of this state that I love...I just wish that my experiences and observations of how we got here made me more optimistic about our ability to change. 

Gloomy thoughts....

Growing Your Business Using Social Networking

This morning I spent an energetic few hours with the PVLD team that is working on a grant-funded project to, in partnership with the Chamber of Commerce, provide resources and support to small and home-based businesses with a particular focus on businesses and potential businesses operated by members of the Baby Boomer generation.

A key part of the project is to develop a website that uses social-networking tools to connect local business people with one another, help them promote and market their businesses, and given them quick and simple access to reliable information and other resources.

The morning was capped off by a very productive discussion with the Chamber about what the site should offer and how it should be designed.  Although there was a lot of interest and some great ideas, it was clear that our group has varying degrees of understanding of online social networking and how it might be leveraged by businesses.

Synchronicity struck when I got back to my office and found this post on a blog I follow regularly.  Accordig to a recent study by AMI Partners,

More than 600,000 small businesses (SBs, or companies with up to 99 employees) in the United States will deploy integrated social networking services in the next 12 months—up from about 300,000 currently, according to the latest study by New York-based Access Markets International (AMI) Partners, Inc.

Looks like our project is really timely! If you are a business owner (or someone thinking about starting a business) on the Palos Verdes Peninsula  we'd love to talk to you about your business needs and challenges.  Just leave a comment with your contact information below and someone from the library will be in touch!