Tony:
Thank you for your email about the Jacksonville Public Library (JPL) – an issue it appears we agree on!
In the spirit of full disclosure, I need to state up front that (in addition to serving on the City Council) I also serve as Vice President of the Friends of Jacksonville Public Library – an organization whose sole purpose is to raise money for the JPL system. With that said, I am a strong advocate for (and supporter of) the JPL.
As you probably know, the budget for the JPL was reduced significantly by the Finance Committee during the recent budget hearing process held at City Hall. As a member of the Finance Committee, I want to provide you with some background on the budgetary process and what specific reductions were made by the Finance Committee.
Budget Background
Please note the budget for the JPL includes a number of expenses which fall into what I describe as three basic categories. Those three categories are controllable costs, internal service charges and indirect costs.
Controllable costs are those expenses that are within the control of the JPL Board of Trustees and Executive Director. Controllable costs include salaries, employee benefits, utilities, books and materials.
Internal service charges are expenses of other units of city government allocated to the JPL by the mayor. Internal service charges include cost allocations from Fleet Management, the Information Technologies Department (ITD) and the Office of General Counsel – to name a few.
Indirect costs are the most difficult to explain. According to the glossary for the City of Jacksonville Annual Budget, indirect costs are "administrative and overhead expenses attendant to the performance of a service that are not actually considered to be an integral part of that service." The indirect cost allocation permits the library to reflect a true cost of doing business by adding the fractional expense of such city administrative functions as payroll, accounting, building use, administrative services, among the variety of support provided by other General Fund departments.
It is important to note that the JPL is the only city department assigned an indirect cost allocation. The indirect costs are computed annually but are based on "actual" expenditures from two years prior. The JPL needs the indirect cost allocation because that figure is often required on grant applications for state and federal funding. The grant applications require that the JPL show the true cost of doing business when compared (by the grant agency) to other libraries competing in the pool. Failing to show the indirect cost would result in lower funding from these external providers as many grants are matching fund grants (such as the State Aid to Public Libraries Grant from the Florida State Library Division). The JPL's need for a computed indirect cost allocation (for grant application purposes) has resulted in that same figure being included with each year's annual budget.
The indirect cost allocation (since FY 2005) has been as follows;
FY 04-05 FY 05-06 FY 06-07 FY 07-08 FY 08-09 FY 09-10 FY 10-11
| 2,591,869 | 2,803,964 | 2,803,964 | 5,185,474 | 6,872,583 | 8,936,376 | 8,213,899 | |
The complete JPL City Council approved budget for the 2010-11 (current) fiscal year is summarized as follows;
Salaries 14,309,242
Employee Benefits 4,051,866
Expendable Accounts 2,880,304
Books and Materials 3,107,629
ITD Network and Computer Charges 5,559,251
Internal Service Charges 1,480,568
Indirect Cost Allocation 8,213,899
Total 39,602,759
Development of JPL's 2011-12 Budget
Up until Mayor Brown took office and presented his FY 2011/12 budget to the City Council (on July 15, 2011), the library budget had been a moving target.
In March, the Peyton administration requested that the Library Board of Trustees submit a 2011-12 budget that reflected a 15% reduction from this year's City Council approved budget (of $39.6 million). The 15% reduction request computed to $5,940,414. However, the 15% reduction request from the Peyton administration was accompanied with instructions that the reduction could not be taken from the indirect cost or internal service charge line items. Instead, the reduction could only come from controllable costs – a pool that totaled only $24,349,041. Therefore, a $5.9 million reduction from only controllable costs wasn't a $15% reduction, it was actually a 24.2% reduction.
As directed, the Board of Library Trustees complied a budget reduced by $5.9 million and submitted it to the administration in April. To meet the $5.9 million reduction, all libraries would curtail service hours to 40 hours per week, Tuesdays through Saturdays (no Sunday hours anywhere), and the Maxville Branch would be closed altogether. In addition, 78 full-time positions and 25 part-time positions would be eliminated.
During the review process, the administration requested JPL to submit a second - less severe - budget that would maintain status quo at all locations, but would eliminate all costs that would not affect current service hours. JPL submitted a second budget which would only eliminate approximately $425,000 by cutting janitorial and security contracts, maintenance contracts on equipment, hardware and software licensing fees, and operating supplies. This second budget was incorporated in Mayor's Peyton's preliminary budget submittal to Council in May via Ordinance 2011-307.
On June 24, the Budget Office requested JPL to submit a third budget with a reduction in the amount of $2 million - above and beyond the $425,000 submitted in April. The new reduction amount of $2,425,000 from the FY 2010-11 (current) Council approved budget represented a reduction percentage of 6.1% overall (or 9.9% of controllable costs). A third budget reflecting this reduction was submitted to the administration on July 5, 2011.
The Actual 2011-12 JPL Budget as proposed by Mayor Brown
On July 15, 2011, Mayor Brown delivered a balanced budget to the City Council which included a $905,502 reduction to the budget of JPL as compared to the current year's budget. The mayor's proposed JPL budget for the 2011-12 fiscal year is summarized as follows;
Salaries 14,253,352
Employee Benefits 14,253,352
Expendable Accounts 2,446,453
Books and Materials 3,107,629
ITD Network and Computer Charges 4,750,996
Internal Service Charges 1,391,039
Indirect Cost Allocation 8,624,606
Total 38,696,857
Finance Committee Action Impacting the 2011-12 JPL Budget
The JPL budget was reviewed by the Finance Committee on August 25, 2011. Following discussion about the same, Committee Chairman Richard Clark stated that closing all libraries one day a week was more equitable than closing certain branch libraries – as has been suggested (or threatened, depending on your perspective) in the past. Chairman Clark offered a motion to reduce the JPL budget by amount equivalent to the savings achieved by closing all libraries on Monday - or $2.9 million. Barbara Gubbin, the Executive Director for JPL who was present for the JPL budget hearing stated that in anticipation of a Council Member moving to reduce the JPL budget by an amount equal to the savings achieved by closing all libraries one day a week, she had run the calculation and the actual cost savings would only be $2.1 million. Although the Finance Committee voted to approve the Clark motion, I did not support this reduction.
On August 30, 2011, the Finance Committee conducted a final wrap-up meeting for the budget hearing process. Although I was excused (out of town) and did not attend the meeting, the Finance Committee adopted a motion to require all components of city government to absorb the additional cost resulting from the City Council's recent action to accept (not waive) the October 1, 2010 actuarial study for the General Employees Pension Plan (GEPP). Accepting the actuarial study will, effective October 1, 2011, raise the employer (city's) contribution rate on all salaries paid to GEPP participants from the current 13.5% level to 17.22%. The overall impact of accepting the actuarial study results in a $5.8 million deficit in next year's budget, and the JPL's pro rata share of that deficit is estimated to be $476,000. Unless reversed, the Finance Committee's motion will require an additional cut of $476,000 from the JPL budget.
At the regular Finance Committee meeting held on September 7, 2011, we worked on wrapping up a few loose ends relating to the budget. During the discussion, I offered a motion to restore the $2.1 million cut to the JPL budget. Although my motion received a second, my motion failed by a vote of 2-5.
All tolled, the Finance Committee reduced the JPL budget (during the budget hearing process) by nearly $2.6 million. Combined with Mayor Brown's original proposed reduction of $905,502, the total reduction to the JPL budget (as compared to the current fiscal year) is approximately $3.4 million – or a reduction of nearly 8.6%. Furthermore, if you remove the $8.2 million indirect cost (a phantom cost that is never shown for any other city department or division in the general fund) from the current budget, next year's $3.4 million cut actually represents a 10.8% reduction.
Going Forward
As you will see from the attached spreadsheet (which depicts the mayor's proposed 2011-12 budget for the JPL as of July 15, 2011, as well as JPL expenses for each fiscal year beginning with and since FY 2004-05), the library management team has done a remarkable job in reducing "controllable" costs from $25.5 million in 2005, to $24.4 million in 2011. However, an examination of "internal service charges" and "indirect costs" (costs passed on to the JPL by the city which JPL has no control over) quickly reveals that indirect costs have more than tripled: from $5 million in 2005, to $15.2 million in 2011 – this year's budget.
Furthermore, inasmuch as an 8.6% reduction was not asked of all other components of city government, I feel the JPL is being unfairly targeted to carry more than their fair share of reductions – particularly when considering JPL's controllable costs are actually lower now than they were in 2005. In addition, it is important to note that the Finance Committee completed the budget hearing process with more than an $8.9 million surplus. Of this amount, $5 million was applied to facilities capital maintenance expenditures and the remainder ($3,932.043) was applied toward road resurfacing – both on a pay-as-you go basis. (Funding used for facilities capital maintenance and road resurfacing projects is ordinarily borrowed.)
To wrap up, please be advised that a public hearing on the proposed millage rate (bill number 2011-404) and the proposed budget (bill number 2011-405) will be held at tomorrow night's City Council meeting (September 13, 2011), beginning at 5:00 PM in the City Council chambers at City Hall. As a library supporter, I encourage you to consider attending the meeting to voice your concerns about the proposed reductions to the JPL.
In closing, I apologize for the length of this reply, but hope you find the information herein to be useful. In addition, I want to thank you again for writing to me on behalf of the Jacksonville Public Library.
John R. Crescimbeni
City Councilman, At-Large, Group 2
Office of the City Council
City Hall at St. James
117 West Duval Street, Suite 425
Jacksonville, Florida 32202
(904) 630-1381
-----Original Message-----
From: Tony Allegretti [mailto:theurbancore@gmail.com]
Sent: Monday, September 12, 2011 4:37 PM
To: Crescimbeni, John
Subject: NO on Additional cuts for LIBRARIES
The Mayor's balanced Budget proposed a $900,000 cut to public libraries. Now the City Council is acting to more than triple those cuts.
Please do not cut the public libraries beyond the original proposed cut of $900,000. Additional cuts will rip apart the fabric of our community.
Our city suffers a serious deficit in literacy.
Reading comprehension is our biggest problem.
Over the past 5 years, more than 100 positions have been lost within the Jacksonville Public Library System, if the additional cuts over the $900,000 are enacted then an another 32 full-time jobs will be lost.
It is not acceptable for the City Council to now increase the proposed 2011-2012 library cuts from $900,000 to $3.4 million and thereby close ALL twenty-one libraries on TWO OR THREE DAYS every week and with limited hours of service on other days.
THANKS FOR DOING THE RIGHT THING!
Tony
Tony Allegretti
Jacksonville, Fl 32207
theurbancore@gmail.com
