This article highlights information from the following meetings:
(Recordings for the Jones’ meetings are usually posted 2-3 weeks after a meeting and can be found at the Library’s agenda center.)
Jones’ Budget Committee (11/16/20)
Jones’ Full Board Meeting (11/12/20)
In these especially difficult times, we’re all thinking about budgets in every aspect of our lives. Amherst residents face additional challenges and concerns because of four major capital projects looming over the Town’s ledger.
Among these four projects, the Jones’ Library demolition/expansion project will come to a vote first, probably this spring. Discussion of the Jones’ proposal took up half of the Town Council’s November 14th three-hour retreat concerning the four capital projects. Councilors asked comprehensive questions about the project before they could make decisions. Funding for the Jones Library building may impact funding possibilities for the upcoming Fort River School project as well the Fire Station and DPW.
Councilors’ main questions focused on the actual cost of the Library project, how the proposal could be funded by the Town, and the ability of the Library to function in the future with a larger building.
The Jones’ plan is for a proposed $35.8 million project with $13.8 anticipated from a state grant and $22 million expected from the Town. This projected cost does not include such items as debt service, cost overruns, and traffic detour/routing expenses, among others.
The Jones Library has asked the Town Council to vote to accept the proposal by April 30, 2020, in which case the Library will promise to donate $6,000,000 towards the Town’s share. If the Jones is unable to raise this amount, they pledge to borrow money using the Library endowment as collateral. Contributing this amount to the Town was proposed by the Jones Trustees in 2016. The Jones Library building and land is owned by the Jones Library, Inc., a non-profit.
The Jones is facing significant budget challenges right now for its current (FY 21) operating budget. Five retiree positions have not been filled in the last two years. Even though the building is closed to the public, the Jones will have used all of its endowment draw for this year by January. They are depending upon the Friends of the Jones Library System (Friends) Development Committee to raise the shortfall.
How will the Library be able to operate?
1) Some staff are receiving salary increases
Library Director Sharon Sharry has been given a new three-year contract and a step increase to a yearly salary of $108,547.
Her goals next year will focus on “supporting” the work of the Friends’ Development and Capital Campaign committees. She will oversee work with the Library’s Equity Collaborative Team to ensure that racial equity concerns are planned for all aspects of the Library staffing and services. Lastly, Sharry will work to ensure a positive Town Council vote for the demolition/expansion project through public informational sessions such as the “Library Chats.”
Sharry reported that she is working with the Town for staff increases at the library, including within the part-time wage scale. No details were given.
2) Endowment and Woodbury Funds increase but their long-term viability is questioned
Dan Voss, the Jones’ investment services consultant from the Vanguard Group, presented the annual report. As of 9/30/20, The Endowment and Woodbury Funds are at $8,430,012 and $702,669 respectively. This is a significant increase since last spring’s decline.
In a good news/bad news scenario, Voss noted that it will be more difficult to sustain the principal if the Library continues drawing 4.5% yearly. The endowment currently pays for about 12 percent of the Library’s total operating costs. The draw this year was $348,867.
Voss stated that there were three options: (1) changing the stock allocation to 70 percent stocks and 30 percent bonds (now at 60 percent and 40 percent); (2) withdrawing less money per year; and/or (3) increasing contributions to the principal.
Treasurer Bob Pam asserted that in the next ten years, the endowment cannot be maintained and there needs to be more contributions. President Austin Sarat did not want to discuss the concern at this meeting, and Pam responded that he wanted the Trustees to “understand the reality for us.” No plans were made to discuss this in the future.
Clearly, if the Town accepts the state grant for an expansion, and the Trustees cannot raise the promised $6,000,000, using the endowment to fulfill the Trustees’ pledge will make it extremely difficult to run the Library. This will also add debt service to the Jones’ budget.
The Library also needs state aid, which pays for about 6.5 percent of its operating costs. State aid is contingent upon opening a certain number of hours a week and purchasing a certain amount of materials. If the Library falls below either of these benchmarks, it will lose its state aid.
3) This year’s operating income is uncertain
This year’s entire endowment draw will be spent by January, with half of the fiscal year remaining. The Library needs money through the Friends’ fundraising efforts or else it will have to draw more from the endowment than planned, thus diminishing the principal.
Trustee Lee Edwards and volunteer Kent Faerber, members of the Friends’ Development Committee, set a goal of raising $150,000 this fiscal year. They are optimistic but cannot promise that the Friends can raise this amount, which would net the Jones about $100,000 after expenses.
Sharon Sharry said that “it is hard to draw lines between fiscal years” with fundraising.
Faerber noted that there needs to be a protocol about how to report to the Jones in a manner which fits into the Jones’ budget planning. Ironically, Pam had brought up this exact issue when the Memorandum of Understanding with the Friends was developed two years ago.
No plans were made to discuss a possible protocol.
Pam asked the Director about examining the Library’s future budgeting for a period longer than a year or two at a time. Neither Sharry nor Trustee committee member Christopher Hoffman commented on this request.
It’s evident that the Jones Library budget is precarious. Pam is right to emphasize that the Trustees need to engage in serious long term budget planning. If the library is having so much difficulty with its current financing, it seems unlikely that they could operate a larger building.
Meanwhile, the Town Council needs to judge the viability of the demolition/expansion project after the Trustees or Director provide a detailed list of all related financial obligations that have not yet been identified. The Council also needs to evaluate whether the Library would be able to operate a larger facility and still maintain its endowment and its state aid.. Finally, Council needs to ascertain whether or not the Town could afford to add a large appropriation to cover costs of the project and even some operating costs if the Jones finds itself in a jam.
Terry S. Johnson is a retired Amherst teacher, blossoming poet, and a lifelong student of art, architecture, history, and languages.