Questions for the Library

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On Monday night (Jan 28) the DeKalb Public Library will present its plans to the Committee of the Whole (city council and staff) to begin the approval process for selling public debt bonds to finance the library’s $24 million expansion. This city council meeting is the first such meeting after the deadline passed for the municipal officers (Mayor and council members) to place a referendum on the April 2013 ballot. That places the city council in the position of “turning down” an $8.5 million grant from the state because to get the grant the Library Board must secure financing before June 1, 2013.

From City Attorney, Dennis Frieders, memo to City Councikl
From City Attorney, Dennis Frieders, memo to City Councikl

The Library Board has steadfastly refused to consider putting their expansion plans in front of the voters via referendum. Their stubbornness to avoid such public scrutiny of their plans led to numerous improper if not illegal closed session meetings as well as secretive, unethical and probably illegal discussion and action on the library’s property tax levy. The plan has always been to exploit the City of DeKalb’s Home Rule authority. Home rule units have near unlimited power to incur debt without referendum or voter approval. Thus the staff’s careful wording on the CoW Agenda: The Library is a component unit of the City; therefore the City would have to issue these bonds on behalf of the Library.

The arrogance of the Library Board’s motivation for their freight train strategy is because voters have no vision.

Hopefully the city council doesn’t put their blinders on because there are major questions with this proposal.

1) How does the new, downgraded to A- credit rating the State of Illinois just received impact the City’s ability to borrow and the interest rates that taxpayers will be charged for the library’s debt obligations?

2) If the State of Illinois needs to borrow the $8.5 million to grant it to the library a) is it a grant or a loan; and b) what if the library spends $24 million and the state can’t borrow the money?

3) Should the City issue bonds on the pledges for donations the library may get or should the library first collect from all pledges before any bonds are issued?

4) Is there really enough funds in the TIF piggy bank to be handing a million dollars to the Egyptian Theatre, give the library another million and renovate city hall? If there is shouldn’t the city consider declaring some of it as surplus and returning it to the other taxing bodies like District 428 who’s facing a $2.3 million operating deficit this year or should everyone just raise their taxes?

5) Can the taxpayers afford the Library Board’s vision?

There still remains a legal question. Is the library a component unit of the city? There are two Illinois Attorney General Opinions which state that a library is “special district” under the Illinois Constitution and as such, is bound by Illinois Statute and not by any local ordinance or agreement.

 

17 COMMENTS

  1. America is changing as the wealth has been distributed upward. Now half of American families share only 1% of the wealth. This while the Forbes 400’s wealth has increased 400% and their taxes have decreased by 40%. I believe that the oligarchs like the Waltons and others should pay for these civic projects. The Waltons are now worth over 96 billion dollars, more than 30% of our citizens. The robber baron Andrew Carnegie built libraries with his fortune after abusing his workers during his lifetime. Maybe the Waltons will find a conscience. They have destroyed many small businesses and American manufacturing along the way. Our weakened tax base that will struggle to finance public projects in the future. In Chicago, Mayor Rahm is trying to privatize public works. We will see if the big winners are the Wall Street banks as in the city parking meter debacle.

  2. Regarding question 2 above, this is a grant. The State of Illinois will pay this in real cash money once certain terms of the grant are fulfilled. For doubters, please name me one example where the State of Illinois has made a construction grant to a library and not followed through with real cash. I have no opinion on whether the library expansion is a good idea. I just wanted to clarify this technical point.

    • That type of information is being sought through FOIA but I know of at least one of those FOIA’s that was denied because the state has not issued any of the monies. Libraries not receiving promised funding… Well this program was announced in 2009. It was supposed to be strictly regulated by a scoring system to make sure only qualified libraries received any of the $50 million except of course Chicago libraries, they automatically were eligible for 20% of the program because they were, well, from Chicago. The next to receive an award from the Illinois Library Construction Grant Program, some time in 2010, was the Peoria Riverfront Museum, which isn’t a library but we’re talking [snark]strict guidelines.[end snark] But then someone sued challenging the constitutionality of the revenue streams projected for the Build Illinois Bond Program that funds this program. That challenge was denied in Nov. 2011. Funding levels still do not support this program due to all the delays in getting the video poker laws passed and implemented.

      I do remember it taking Hinckley some ten years to get promised grant funding for school construction. Ask Bob Pritchard about that.

      Should taxpayers consider the state not being able to fund this program? Can the state pay its bills? Why would the state include the following language into the Public Library Construction Grant statutes?

      (30 ILCS 767/15-37)
      Sec. 15-37. Carry over projects. If a public library has been determined eligible for a public library construction project, has arranged and approved all local financing, and is eligible to receive a public library construction project grant award in any fiscal year, but does not receive such award in that year due to lack of adequate appropriations, those public library construction projects shall continue to be considered for grant awards for the following fiscal year.
      (Source: P.A. 96-37, eff. 7-13-09.)

      Here’s some other libraries grappling with associated problems…
      http://crystallake.patch.com/articles/library-pushes-through-funding-woes
      http://openline.blogspot.com/2012/09/aurora-public-library-throws-taxpayers.html

        • With respect to funding, especially right now at the state government level, I would be very cautious to not get the cart before the horse. DKPL and The City of DeKalb should not issue bonds or otherwise spend money until the state grant is actually in the bank.

          Not that long ago District 428 received notice that a $21 million construction bond had been granted. It then took awhile to actually get the money. More importantly, as I recall (I’m on the 428 Finance/Facility Committee) the primary source of the funds was Federal ARRA but administered through the Illinois State Board of Education’s School Construction Program. It was a strange and unexpected twist of fate. 428 had applied for the funds much earlier and not received anything. When ARRA money became available, all of a sudden (but after the school had been built) the grant was issued. Point is, you can’t count on Illinois to find its own money for whatever grant they say they’d like to issue. Might get it, might not. They’re just building wish lists and usually robbing Peter to pay Paul. That’s why statutes have language to disavow responsibility in case funds are not available.

          Another point is that even though 428 did eventually luck out and get some money, state education is now broke and holding back both mandated transportation funding and GSA funding. That creates a significant shortfall and is why 428 will be millions into deficit spending for years to come. With the library grant, who knows what other program IL would cut if in fact DKPL gets any money? Of course we already know IDES is closing down the DeKalb office. What else will fall as IL plays their games?

          Real leadership calls for restraint until times are better. Now is hardly the time to build expensive new buildings when schools are broke and the unemployment office can’t be funded!

          • Mr. Mellott – I think it might be feasible to actually delay issuance of the bonds until the grant check is in the bank, but I think the City Council would need to approve the bonds before the State issues the grant check. You should be able to get the answer for this from the DeKalb Library.

      • Mr. McIntyre – I read both of the articles that you provided links for. Neither article disputed my assertation that when a library is given one of these library construction grants, it actually does get the money. This assumes the library does meet the terms of the grant.

          • I should clarify that Sycamore Public Library did not receive a grant from the current block of grants, but from an earlier block of grants.

          • FY2013 was the very first year of Public Library Construction Grant Act awards. If Sycamore Library received a construction grant, it certainly came from a different grant program, most probably Live & Learn.

            Live & Learn is a whole different kettle of fish. Instead of being shrouded in secrecy, Live & Learn is incredibly transparent, with a named review board, applicant workshops and annual statewide announcements of the winners. If memory serves, the highest grant award for an individual library under this program is $125,000, for improvements such as roof replacement and wheelchair accessibility.

      • Let me tell you about my request for information under the Illinois Freedom of Information Act. I asked the Illinois State Library for the rankings of the 47 eligible applicant libraries and was denied on the basis of this exemption:

        (h) Proposals and bids for any contract, grant, or agreement, including information which if it were disclosed would frustrate procurement or give an advantage to any person proposing to enter into a contractor agreement with the body, until an award or final selection is made. Information prepared by or for the body in preparation of a bid solicitation shall be exempt until an award or final selection is made.

        I cannot find out if the 15 “winner” libraries included the Chicago libraries, or which one had to drop out for losing a referendum vote (which is how DeKalb must have gotten an award after all) or what non-library organizations have been promised money from this pot. The state is saying it can withhold the information because it has not made any actual awards — not even to Aurora, which provided for its match even before being notified last July that it would get $10.8 million.

  3. Someone should teach these people the difference between need and want. Spending way too much on a project we can’t afford or even really need. Has anyone asked the library why they can’t donate or throw out the large inventory of books that never or rarely get checked out? If more computer facilities are in order, there is plenty of unoccupied office space in Dekalb for a computer lab.

    Divide $24,000,000 by 40,000 residents, and you get $600 for every man, woman, and child in Dekalb. And they want to spend this on bricks and mortar? Smells like old boys network to me.

  4. DeKalb’s library is a municipal library. It is part of the city.

    Some public libraries are separate entities, and form their own districts. Public libraries in library districts have to organize referendums for expansions.

    • When it fits the DKPL it is a component of the city (like when they want to use Home Rule to avoid a referendum). When it fits the DKPL is not a component. Two separate AG’s have issued opinion indicating a municipal library is not a component because, for one example, it can sue and be sued in its own name.

      • The term “component unit” can be confusing and they use this confusion in whatever way is convenient, as Mac has noted. The lack of direct power to tax, plus oversight of its budgets, are what make the library a “component unit.” However, in every other way that I’ve observed so far, the library calls its own shots. They retain their own attorney and pay their own insurance against being sued.

        The AG’s opinions that Mac refers to did establish that public libraries are “special districts” and that means stand-alone and covered by the Local Library Act, not the municipal statutes (meaning no home rule for libraries). One of the opinions specifically stated that special districts don’t have to have the power to tax in order to be special districts. The other settled the question that a person who was treasurer of a municipality could also serve on the public library board; no one is allowed to hold two municipal positions but the library board was not a municipal position, it said.

        It’s weird that Illinois has library districts and public library component units, but not municipal libraries? Public libraries are kind of an anachronistic hybrid that only works right when municipal oversight is strong and confident.

        I wonder, is it even lawful for the library to participate in the city’s insurance program, and especially in the Other Post-Employment Benefits (OPEB) program?

        Now, I do believe under the Local Library Act that the city CAN issue bonds on DKPL’s behalf but the question is whether it should. DKPL is a rule breaker and at least once an actual law breaker, and has not followed the other procedures listed in the Act.

        The other objection is the price tag. The state’s share is 65% of eligible program costs and about half the quoted total cost is ineligible. That means there are a LOT of extras in the plan that could be taken out for the sake of the taxpayers, who are still trying to cope with a crummy economy and have been made to pick up the slack for those who have fled.

        • The latter AG opinion was applied when some questioned if Chuck Stowe could be the Sycamore Library board president and be an alderman on the city council at the same time. He served in both capacities. Around that time the Sycamore Library was expanded. The intent was to pay for the expansion through donations. The fundraising campaign went well and goals were met in pledges. Construction was given the green light but the pledges did not materialize and taxpayers footed the bill. The late Martha Wetzel attempted to stop the go ahead on the construction through circulating a petition and writing blistering letters to the editor. Taxpayers were angry and elected Wetzel, in her 80s at the time to the city council by a landslide. Martha later resigned in protest over matters related to historic preservation and tourism.

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