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Friday, January 14, 2011
Balancing the books
On Saturday I plan to attend the official opening of the Stoney Brook Library, the new state of the art building which houses a YMCA as well as a library. The library has been open to the public since November and, according to London Public Library CEO Susanna Hubbard Krimmer, is doing a very brisk business.
The existence of the new library should not surprise anyone; it came out of the City’s 10 year capital plan in recognition of the growth occurring in the Sunningdale area east of Adelaide. It was funded by development charges.
Development charges are paid by new homebuyers and new commercial developments to cover the capital costs of growth, such as roads, street lights, sewer and water, fire halls and police cars, and community centres and libraries, all the things that make a complete community.
Of course, once you have those structures in place, you need to run them and staff them. In short, there will be operational costs. Ideally, the new annual taxes generated by the properties will look after that. That’s assessment growth.
If development charges cover the capital costs, and assessment growth covers the additional operating costs, growth pays for growth.
But if you exempt some developments from development charges as we currently do with industrial development, then somebody has to make up the difference. That somebody is the taxpayer through an increase in the tax levy.
And if you then take the revenue from the assessment growth and, rather than using it to provide services to the growth areas, use it to keep down the tax increase, you’ve got a problem.
Because now you have a library but no money to pay for staff and overhead costs.
That’s pretty much the dilemma facing the London Public Library. They have a new library paid for by homebuyers’ development charges but it will cost about $600,000 to run the place. That, plus some increases in the cost of living and minus some savings from closing down the Northridge Branch, resulted in an overall budget request for an increase of $728,000 or 4.3%.
But Council wants a zero per cent tax increase. It has already earmarked some of the assessment growth needed by the Stoney Creek Library to keep down the tax rate. Now it wants its boards and commissions (read London Public Library) to pare back the budget requests that had already been approved by the previous council.
Last night the Library Board, on which I previously served, considered its options. Ms Krimmer provided a number of scenarios which would have saved between $140,000 and $250,000. Adjustments included improved conservation measures for reduced utilities costs, buying fewer books, closing the Glanworth branch and eliminating Sunday service at the Central Library.
There were also references to a salary freeze for managers and continued vacancy management. This may sound reasonable until you realize that Ms Krimmer was appointed as CEO three years ago and has not had a salary increase since then. Additionally, the position that she held is still vacant, with existing staff covering the functions.
That is something that many on the new council seem to be lacking: awareness of what has gone before. Management salaries frozen for years, positions unfilled, growth in service demand without the budgets to sustain that growth. At LPL, staff numbers have, in the last three years, finally returned to their pre-1995 levels. But in the meantime, the floor space that staff has to cover has actually doubled.
Those are the messages that the Library Board wants to send to Council. The Board wants Council to know not only that it is willing to do its part, but that it has been doing more than its fair share for many years. And it wants the Council to understand that cuts will have impacts on customer service and on employee morale.
And if there are cuts to book collections in the budget but there ends up being a surplus, it wants the money back. Because after all, what better way to balance the books?