SHAKER LIBRARY PRESENTATION TO MAYOR'S FINANCIAL TASK FORCE Chad - - PowerPoint PPT Presentation

SHAKER LIBRARY PRESENTATION TO MAYOR'S FINANCIAL TASK FORCE

Chad Anderson, Library Board President Luren Dickinson, Library Director Maggie Keenan, Business Manager/Fiscal Officer Saturday April 11, 2015

What are we discussing today? Current state of library facility planning Actions against 2012 Financial Task Force Recommendations

1

The Library’s facilities plan considered three alternatives from the 2012 Strategic Plan

Base scenario

Study

Facilities (Winter 2014)

Description

Maintain existing buildings Maintain service

Elements

• Existing building layouts
• No feature improvements

to facilities

Capital requirements

$5M ($4M Main, $1M Woods)

Revenue test #1

• 0.9 mill increase 2016*
• 0.8 mill increase 2022*
• 1.3 mill replace and reduce 2036*

Viable

Revenue test #2

• 0.9 mill increase 2016*
• 0.8 mill increase 2022*
• 0.2 mill replace and reduce 2036*

Not viable

* HB59 penalizes renewals of continuing levies to capture increases in real estate values

Library Facility Options

Alternative 2 (single new facility at Main site) and Revenue test 2 will be the focus of today’s discussion

2

Alternative 1

Feasibility (Summer 2014) Maintain existing buildings Reduce operating costs

• 1st floor Main operations
• Sublease 2nd floor Main for office
• Consolidate Woods service points

$12M Not viable Not viable

Alternative 2/3

Feasibility (Summer 2014) Modernize service Reduce operating costs

• New single facility at either Main

(Alt 2) or Woods site (Alt 3)

• Existing buildings removed/ sold

Up to $20M Viable Viable

The Library has established three objectives for the facilities effort

To meet the unique needs of the Shaker community, leverage historically low interest rates to restructure and transform Shaker Library into a sustainably low-cost, premium service operation

Library Facility Objectives

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1 2 3

The Library has established measures of success for meeting the community’s unique needs

Shaker Library shall:

a)

Maintain a collection appealing and appropriate to the residents of our district

b)

Support community-building inside and outside the walls of the Library

c)

Reinforce other Shaker stakeholder objectives, principally those of the Schools and the City

Measures of success for meeting Shaker’s unique needs

1

4

CLEVNET affiliation allows Shaker Library to meet objective (a) by matching a deep collection with Shaker’s deep education

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1

Source: U.S. Census for educational levels; library groups for unique book titles, except CCPL from American Library Directory

Educational Achievement

Bachelor’s Master’s or higher Shaker Heights 64% 37% 28% 16% 12% 27% Cuyahoga County

Unique Book Titles

(M) 0.11 0.22 0.53 2.37 Lakewood CCPL CLEVNET Westlake

Shaker Library programs are designed to build community and meet objective (b)

Community Baby Shower, Oct. 2014

• 80 parents-to-be attended
• 7 regional child-related agencies
• 3 city depts. & 2 Shaker agencies
• 11 businesses (8 from Shaker)

2014 Program Highlights

• African-American Geneaology
• Shaker High School Art Exhibit
• Memorial Day Book Cart Brigade
• Constitution Day/Veterans Day

Authors Coming in 2015

6

1

Shaker Library is aligning programs with the School’s strategy in support of objective (c)

Objective 1.3 Build a system of school-based and community- based experiences to support the​ academic achievement of all students​

• Play and Learn Station and Early Literacy Programs for preschoolers​
• Homework Help, Reading Skills Center, and SAT prep​

Objective 1.9 Enrich learning and cultivate personal growth for all students through​ experiences beyond the classroom​

• MyCOM activities for students after school, during breaks, and over the

summer​

• Joint 2015 summer library program in county promotes math, cultural activities​

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1

Shaker Library supports programs that align with the City’s initiatives in support of objective (c)

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​To promote and celebrate our differentiated housing stock

• Shaker Housing Index; Shaker Historical Mobile App
• Nationally recognized, award winning library system​

To support Work - Live

• Community Entrepreneurial Office/Career Transition Center: mini-

business incubator, help for displaced mid-level workers

• SCORE counseling for those building new businesses
• Free computer access, technology training, and wireless for shoe-

string businesses and those upgrading skills

1

The Library has established measures of success for sustainable low-cost operations

Financial burden on Shaker taxpayers shall be:

a)

Through transformation, always lower than the average for all libraries in Cuyahoga County

b)

Through transformation, always lower than peak burden on a real (inflation-adjusted) basis

c)

Through transformation, equal or lower than peak burden on a nominal (not inflation-adjusted) basis for an extended period

d)

When transformation complete, within 20% of the likely lowest level of any library in Cuyahoga County

Measures of success for sustainable, low-cost operations

2

9

Shaker Library taxes paid by residents have fallen for four of the past five years

Year Property Tax Collected District Population Per Capita Property Tax Cut 2009 $3.27 million 31,645 N/A 2010 $3.01 million 31,645 $ 8.21 2011 $2.91 million 32,311 $13.27 2012 $2.89 million 32,311 $13.89 2013 $2.70 million 32,311 $19.77 2014 $2.75 million* 32,311 $18.22

Plan will require asking for this tax cut back

• Due to HB 920, collections will never rise on a per-property basis absent action
• Due to HB 59, renewing this continuing levy to capture real estate inflation would permanently

forfeit $0.4M in annual state rollback funds

* Excluding $31k from one-time Office Max tax settlement, tax collections were $2.71M in 2014 Note: State revenue has also declined by ~ $8.45/ capita over the same period; approximately 1/3rd of Shaker Library revenue comes from the state Source: Population sources: State Library of Ohio Public Library Statistics; SHPL annual budgets 2009-2014

2

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How have YOU been spending your Shaker Library Tax Cut?

The facility plan meets measure (a) for sustainable low-cost operations

2015 2016e Shaker Heights Voted Millage 4.00 4.90 Countywide Voted Millage – Avg 5.37 5.44 Shaker Heights Effective Millage 4.00 4.72 Countywide Effective Millage - Avg 4.88 4.96

Note: Assumes passage of 0.9 mills or bond-issue equivalent for Shaker Heights in 2016 Source: SHPL analysis

2

Library Millage Levels within Cuyahoga County

Shaker Library is lower Shaker Library is lower

11

The facility plan meets measures (b) and (c) for sustainable low-cost operations

2

Note: Inflation factor base year 2009, 2015+ projections of 2% p.a.; Revenue Test #2 Source: SHPL Projections; BLS 2009-2014 CPI-U actuals; FRB 2015+ projections 2.89

11

2.91

10

3.01

09

2.82

25 24 23

3.85

22 21 20 19 18 17

3.25

16

3.27

15 14

2.75

13

2.70

12 37

14 year span before nominal payments exceed 2009 levels

$M

Shaker Library Property Taxes Paid

(2009-2025 + 2037)

1.63

25

• 14%

37

• 50%

24 14 16 15 23

2.94

22 20 19 21 18 17

2.80 2.51

13

2.48

12

2.70

11

2.78

10

2.96

09

3.27

$M

Actual Estimate Inflation-adjusted Shaker Library Property Taxes Paid

(2009-2025 + 2037)

12

The facility plan meets measure (d) for sustainable low- cost operations

2

Low-Cost Cuyahoga County Library Systems:

Effective Millage Projections 2016e 2037e Countywide average 4.96 Shaker Heights 4.72 Westlake 2.80 Cuyahoga County 2.50 Lakewood 2.50 2.99

• Post-bond retirement, Shaker Library likely to

require only 2.99 mills to fund ongoing operations and maintenance

• This millage is within 20% of Lakewood’s current

effective millage

• On a per-capita basis, this is a $8.88 annual

premium to Lakewood today in 2015 dollars

Note: Per-capita calculations based on 2014 estimate populations; real estate valuations assumed to lag inflation by –(0.5)% p.a., 2.69 mills required in 2037 if no lag Source: SHPL analysis

13

The Library has established measures of success for premium service

Shaker Library users shall enjoy:

a)

Per capita circulation at the 99th percentile of comparable public libraries nationally

b)

Per capita circulation in the top 10% of comparable public libraries in Ohio

c)

Other value-creation measures (e.g., usage of facilities, computers, programs, etc.) maintained or enhanced through and after transformation

Measures of success for premium service

3

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Shaker Library meets objectives (a) and (b) and produces a value surplus of ~$10M for Shaker taxpayers

Unique circulation 0.932M x $6.21 = $5.79M Computer use (hrs) 0.197M x $14.78 = + $2.91M All other (excludes programs) + $3.93M Gross Tangible Value Creation $12.64M Less property taxes paid (local)

• $2.74M

Less fines and fees (local)

• $0.19M

Net Tangible Value Creation $9.71M Return on local investment 331% Return on total investment 169%

3

Sources: Ohio Public Library Statistics; National Center for Educational Statistics; Ohio Library Council 2013 ROI calculator

Shaker Library Circulation Shaker Library

Net Tangible Value Creation - 2014

34 items checked out per capita annually

4th in State (out of 100) 6th in Nation (out of 2,500)

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The challenge is maintaining or improving these measures in a single facility

3

16

Facility Use by Registered Address

Main Woods

Our current usage patterns show strong geographic affinities Consequently, reducing Woods hours in 2014 destroyed value for Shaker taxpayers

2014 Woods circulation change

(versus Main)

• 10%

Circulation losses ($455,887) All other losses (excludes programs)

• ($168,927)

Gross Tangible Value Loss ($624,814) Operational savings + $159,363 Net Tangible Value Loss ($465,451) Return on investment

• 292%

2014 Woods hours change make-good analysis

New facilities have proven their ability to increase usage even when more distant

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Pre/ Post New Library Facility Annual Usage

533 174 Pre +207% Post (000’s) Center City

• St. Cloud, MN

2009 659 2,048 Pre +211% Post Center City Seattle, WA 2008 Center City Des Moines, IA 2009 578 170 +240% Post Pre

Source: Madison, WI Public Library Foundation; CCPL 2013 Annual Report

3

We have strong hypotheses on barriers to increasing usage at the Moreland (Main) building

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3

1)

Safety

• 11 complaints in formal tracking system
• Most issues centered on teens – transiting library

and especially congregation on front steps

2)

Accessibility

• Elevator has 12 complaints in formal tracking system
• Entrance narrow (50” versus 66” at Warrensville) and

elevated (4’ above grade versus at-grade for most libraries)

• Shared parking with Community Building and

athletics field

• Two points of auto egress – congested to exit for

points north

Barriers to Increased Usage

Purpose-built library architecture has the potential to reduce and/ or eliminate these barriers

19 1)

Safety

• Separate pedestrian entrance requires less in-library transit to

teen center

• New parking has visibility to Van Aken
• Parking lot entrance substantially farther from playground
• At-grade building has no steps
• Drive-up service window available

2)

Accessibility

• At-grade building has no customer elevator, can accommodate

generously-sized, at-grade entrances

• Expanded parking grows available spaces by 45 (+28%)
• Additional egress to Van Aken improves flow to east and north
• Drive-up service window available

Barrier Reductions In addition, right-sized, single floor operations enable substantial staff productivity improvements and utility savings Representative New Facility 3

1 2 1 2 3 3 4 4 2 4 5 5

A new, single-facility Shaker Library can meet objectives (a), (b) and (c)

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3 Shaker Library Visits Pro-Forma Projection

578 173 13 24 471 Sunday hours New building Projected visits +23% Current visits Woods closure Drive-thru (102)

Source: SHPL analysis

000’s

We believe the plan we are pursuing meets the

• bjectives established for the Library facility effort

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To meet the unique needs of the Shaker community, leverage historically low interest rates to restructure and transform Shaker Library into a sustainably low-cost, premium service operation

Library Facility Objectives

What are we discussing today? Current state of library facility planning Actions against 2012 Financial Task Force Recommendations

22

The 2012 Mayor’s Financial Task Force had three recommendations for the Library

• 1. Using the City example, undertake a similar in-depth, independent analysis
• f operations with a focus on reducing costs and improving productivity
• 2. Develop a financial plan that seeks no additional taxpayer funding
• 3. Evaluate the tax savings to Shaker residents and the benefits of joining the

Cuyahoga County Library system

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2012 Financial Task Force Recommendations

3 2 1

The Library has made improvements to operations that have reduced costs and improved productivity

• Reconfiguration of Main Library first floor for ease of

access to nonfiction and video material

• Consolidation of two checkout desks into one central

location

• Implementation of the self checkout system for the public
• Introduction of the self pickup of holds for the public

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2009 Net Tangible Value Added / FTE $150,423 2014 Net Tangible Value Added / FTE $171,543 Productivity growth +17%

Operational Improvement Highlights Productivity Cost Reduction 1

General Fund Budget ($M)

41.8 89.8 4.7 36.8 84.7 5.4 +14%

• 13%

+6% 2014 2009 Library Schools City

Our facilities plan will result in a durable reduction in needed taxpayer support while growing value creation

25

2

Note: Inflation factor base year 2009, 2015+ projections of 2% p.a.; Revenue Test #2 Source: SHPL Projections; BLS 2009-2014 CPI-U actuals; FRB 2015+ projections

• 50%
• 14%

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1.63

25 24 23

2.94

22 21 20 19 18 17

2.80

16 15 14

2.51

13

2.48

12

2.70

11

2.78

10

2.96

09

3.27

Inflation-adjusted Shaker Library Property Taxes Paid

(2009-2025 + 2037)

Shaker Library Visits Pro-Forma Projection 578 173 13 24 471 Sunday hours Projected visits New building Drive-thru Woods closure (102) Current visits +23%

000’s

We evaluated CCPL inclusion, but determined there are three principal reasons to remain independent

• No community is better matched to CLEVNET’s deep collection than Shaker Heights

Shaker is a unique community, and CLEVNET association best meets the community’s needs

• We work to attract and retain residents, supporting other stakeholder’s efforts to do the same

Local control lets us design programs and make decisions based on our community’s specific needs

• CLEVNET membership offers significant benefits to CCPL
• Legislation on inclusion specifies indebtedness to be transferred to the consolidating entity

Consolidation is a "forever" decision. Now is the wrong time

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3

Reasons for continued independence of Shaker Library

We also hypothesized but found wanting five presumed benefits of CCPL inclusion

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3

Hypothesized Benefits of CCPL Inclusion (the “Five Myths”)

1.

Consolidation would result in efficiencies

2.

Consolidation would make Shaker Heights a low-tax community

3.

County’s growing tax base could better support the Library long-term

4.

CCPL is building all new libraries, so they’d build us a new one for free

5.

Communities without local libraries are more likely to support other local levies

MYTH #1 Consolidation would result in efficiencies

Higher CCPL pay scale negates potential administrative savings

• CCPL pay rates typically 20 to 30% higher than Shaker Heights Public Library; difference cancels out

administrator salaries

Potential scale benefits already captured through CLEVNET membership

• Technology infrastructure, access to massive collections, scaled purchasing contracts

CCPL is a good system, but it charges less because it produces less, not because it produces more efficiently

• As indexed to Shaker = 100%, CCPL’s per capita: revenue, 74%; visits, 80%; unique circulation, 64%; computer

hours, 53%

Elusive consolidation efficiencies supported by academic research and East Cleveland inclusion study

• Robert Bish 2001 metastudy on municipal consolidation found no net economies of scale above 20,000 residents
• ECPL inclusion study showed wage rates, headcount and purchased outlays all rising with inclusion

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3

MYTH #2: Consolidation would make Shaker Heights a low-tax community

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Community Millage

Shaker Heights 200.8 Shaker Heights w/ No Library Tax 196.8 Cleveland Heights 172.8 University Heights 144.1 Lakewood 131.7 Bay Village 129.7 Olmstead Falls 124.0 South Euclid 124.0 Euclid 120.8 Chagrin Falls 115.7 East Cleveland 113.8 Cuyahoga Average 104.0 Beachwood 90.4 Solon 86.0

2014 Property Tax Rates

3

MYTH #3: County’s growing tax base could better support the

Library long-term

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It is true that growth helped cushion the reduction in valuation in CCPL’s service area

• 2009-2014 change in assessed valuations, CCPL –(12%), SHPL –(17%)

However, this growth benefit has largely played out

• Thomas Bier: “Cuyahoga has a unique distinction. It is Ohio’s first fully developed county” – PD, 4/5/14

As an independent library, Shaker also retains certain legacy state funding advantages

• SHPL per-capita state funding = $43.23

CCPL per-capita state funding = $30.56

CLEVNET’s continued growth provides a countervailing benefit in spreading fixed costs that CCPL’s closed system cannot

3

CLEVNET & Cuyahoga County Branches 1983

Cuyahoga County Public Library (27 branches) CLEVNET (4 public libraries, 39 branches) Lakewood, Rocky River, Westlake

31

3

CLEVNET & Cuyahoga County Branches 2000

Cuyahoga County Public Library (27 branches) CLEVNET (24 public libraries, 86 branches) Lakewood, Rocky River, Westlake

32

3

CLEVNET & Cuyahoga County Branches 2015

Cuyahoga County Public Library (27 branches, 2.5 million items) CLEVNET (41 public libraries, 104 branches, almost 11 million items) Lakewood, Rocky River, Westlake

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3

MYTH #4:

CCPL is building all new libraries, so they would build us a new

• ne for free

34

New

Garfield Heights Mayfield North Royalton Olmsted Falls Orange Parma Parma Snow

• S. Euclid-Lyndhurst

Warrensville COMPLETED IN-PROGRESS

Renovation

Beachwood Brook Park Brooklyn Chagrin Falls Fairview Park Independence Maple Heights Parma Heights Solon Southeast

No Change

Bay Village Berea Brecksville Gates Mills Middleburg Heights North Olmsted Richmond Heights Strongsville 3

MYTH #5

Levies in CCPL Districts

59% passing

Levies in Independent Districts

72% passing

Communities without local libraries are more likely to support local levies

35

School Levy Passage Rate, 2000-2014

3

We believe we have affirmatively responded to the Task Force’s recommendations

36

• 1. Using the City example, undertake a similar in-depth, independent analysis
• f operations with a focus on reducing costs and improving productivity
• 2. Develop a financial plan that seeks no additional taxpayer funding
• 3. Evaluate the tax savings to Shaker residents and the benefits of joining the

Cuyahoga County Library system 2012 Financial Task Force Recommendations

37

“As our case is new, so we must think anew, and act anew”

• A. Lincoln

38

Questions?

Contacts

• Chad Anderson, Library Board President

chad.anderson@shakerlibrary.org

• Luren Dickinson, Library Director

dickinson@shakerlibrary.org; 216.991.2030

39

APPENDIX

40

How much do Shaker property owners pay in library taxes?

2014 Cost Per Capita $84.96 Cost per $100,000 valuation $122.50 annually $0.34 per day Percent of 2014 Shaker property taxes paid to library 2.9% Percent of all 2014 Shaker Heights taxes (including income tax) 2.2%

Source: Cuyahoga County Budget Commission 41

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71% 17% 13%

EXPENDITURES

Materials Facility & Other Staff 58% 38% 4%

FUNDING

Other State funding Local property taxes

2014 SHPL Budget

Funding and expenditures

Note: excludes facility capital needs

Who runs Shaker Library?

7-member Board of Trustees appointed by the Shaker School Board An independent governmental entity Service area is school district

43

Heavyweights Regulars Brainy Bunch

44

Who are our biggest user groups?

12.6%, 6-10 or 40+ books per year 20.2%, 40+ books/year 25.8%, 40+ books/year

45

Using library computer 28% [CATEGORY NAME] [PERCENTAGE] [CATEGORY NAME] [PERCENTAGE] [CATEGORY NAME] [PERCENTAGE] Attending a program 10% [CATEGORY NAME] [PERCENTAGE] [CATEGORY NAME] [PERCENTAGE] [CATEGORY NAME] [PERCENTAGE]

What do people do at the library?

Our vision for the library of the future

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Shaker Heights Public Library is an indispensable part of our community, known for:

• A wide range of resources
• Innovative, customer-driven services
• Vibrant and welcoming spaces
• A knowledgeable and passionate

staff

Bond yields are historically low

47

Historical Yields: 11-Bond GO Index

(1970-2014)

Note: Index to 20-year maturities, S&P AA+ credit quality Source: Bond Buyer

2 4 6 8 10 12 14 2010 2000 1990 1980 1970 2020 1985 1995 1975 2005 2015

% Yield

2014 SHPL Gross Tangible Value Creation

48

49

2009 SHPL Gross Tangible Value Creation

2014 Woods Hours Change – Gross Tangible Value Creation

50