Ask ELi: Should Our Library Join the Capital Area District?

In response to ELi reader inquiries about the cost of running the East Lansing Public Library (ELPL), we’ve investigated the question of whether the City of East Lansing would save money if the ELPL ceased operating as an independent library and joined the Capital Area District Library (CADL) system. Our research into this question suggests that resultant savings, if any, would be small, and that the City might actually lose money by joining the CADL system.

Background:

East Lansing is now facing the need for significant budget-cutting in the wake of the November election, in which the majority of East Lansing voters turned down the income tax proposal. Several City Council members have made it clear that they consider nothing to be off the table in terms of potential cuts. So, would turning the library over to CADL save money?

There are really two deeper parts to this question. Firstly, would joining the CADL system save East Lansing money which could then be allocated elsewhere to fill gaps in the City budget? Secondly, would joining the CADL system provide East Lansing residents with more or less access to library services?

Municipal versus district libraries in Michigan:

There are many different ways for libraries to exist under Michigan Law. ELPL is a municipal library, meaning that it is a department of East Lansing’s city government, and its employees are City of East Lansing employees.

By contrast, CADL is a district library. District libraries exist beyond the reach of a single municipality and are sponsored by two or more government entities. The boundaries of the district are determined by the boundaries of the sponsoring cities. District library employees are employed directly by the district library.

The history of CADL and ELPL:

CADL was formed in 1997 when the then-struggling Lansing library system (part of the Lansing School District at that time) joined with the Ingham County library system. According to Sheryl Knox, a long-time employee of CADL, East Lansing was invited to join the CADL system at that time.

“East Lansing was also approached to participate and they declined,” Knox tells ELi. “They were the public library jewel in the area, comparatively well-funded with good collections and professional staff. There was zero incentive for the city to take a risk on joining this new, untested endeavor. So, they passed. No resident of East Lansing at that time was asking ‘why not join CADL.’”

How the library millages are working in practice:

Both ELPL and CADL are supported by dedicated property tax millages.

ELPL operates on two separate millages, one of which is leveraged by the City Council through authority granted by the Michigan laws governing city libraries, and one of which was approved by popular vote. The combined millage rate is 1.997 mills, and money collected via library millages directly fund the operation of the library.

In East Lansing, no library funds currently come out of the East Lansing general fund because of the millages. That said, 4% of the millage money is going to fund East Lansing’s Downtown Development Authority (DDA), following Michigan’s tax capture laws, which is currently adding up to approximately $70,000 per year according to East Lansing Library Director Kristin Shelley.

CADL’s millage is entirely based on voter approval in the districts in which it operates, and is currently set at 1.56 mills. This rate is adjusted whenever the CADL millage comes up for renewal, depending on operating expenses.

Where the numbers get complicated:

On the face of it, with the 0.437 mills difference in library millage rates, it would seem there would be a small savings for East Lansing property-tax payers if ELPL joined with the CADL system. However, cities participating in CADL are expected to provide library buildings as part of their commitment to the District. They are also expected to pay to maintain their library buildings and the library grounds.

Currently, ELPL pays the City of East Lansing for informational technology (IT) and human resources (HR) services. ELPL also pays for building maintenance and utilities out of our library’s millage-funded operating budget, and that would have to be paid from the City's General Fund if ELPL were to join the CADL system.

So, while the ELPL runs on 1.99 mills of property taxes that go directly to the library’s operating expenses (less the 4% diversion to the DDA), the ELPL is effectively contributing approximately $235,000 into the City’s general fund.

Jennifer Amormino, who is the executive assistant to ELPL’s Director, told ELi, “Due to the financial challenges of the City, we expect the $235,000 amount to increase.” (During the November 21, 2017, City Council meeting, Councilmember Ruth Beier hinted as much when she asked, “How much revenue can we claw back from the library?”)

So, in terms of savings, City taxpayers might appear to save a nominal amount on their property tax bill if ELPL were to join CADL, but it appears the real costs would be close to the same after figuring in building maintenance and the fact that the City would lose revenue its currently obtaining from ELPL.

We should note that, in addition to millages, both library systems have several smaller, additional income streams. These include revenue from the State, library fines, and private donations, such as the large anonymous donation that paid for the majority of the East Lansing’s recent library renovation.

Would joining CADL give East Lansing residents access to a higher level of services?

According to the information provided to us from ELPL Director Shelley and from Scott Duimstra, the Executive Director of CADL, the two library systems maintain similar levels of staffing. This was based off a comparison of ELPL and CADL’s Okemos branch, which have similar circulation numbers.

Each library system offers an option for out-of-district patrons to buy access with an annual membership fee. For ELPL, that’s $30, and for CADL, that’s $50. Additionally, both libraries participate in the “visiting patron” program through MeLCAT, meaning that patrons of either library system can check out any library materials that they would be able to access through the MeLCAT system simply by presenting their home district’s library card. This means the majority of each library’s collection is already available to out-of-district card holders.

What about programming? The programs provided through each library are available to the general public as well, including the Maker Space in East Lansing. Because ELPL is an independent entity, Shelley has a high level of autonomy in determining library programs, but according to Duimstra, the librarians at the individual CADL branches also have a lot of input into their libraries’ offerings. Both libraries have a cooperative relationship with MSU and utilize MSU students as pages and auxiliary staff.

What about pension liability?

If the ELPL were to join CADL, East Lansing Library employees would lose their East Lansing jobs and have to reapply to become employees of CADL. This would mean removing them from the City’s liability for future pensions.

According to Shelley, 1.5% of the city’s pension liability is due to pensions for ELPL employees, which includes retired employees as well as current staff. Shelley told ELi that “the current library employees who get retirement benefits are part of a Defined Contributions plan or on a Hybrid plan, which is a cost controlling retirement plan. Almost half of ELPL’s employees are contingent employees and do not receive any benefits.”

Note: When this article was published, it stated that the approximately $235,000 that the ELPL pays to the City includes rent. It does not. That figure is for services which the City provides, including Information Technology (IT) and Human Resources (HR) services. The article has been amended to reflect this.

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