If the city is to take over operations of Nicholas P. Sims Library, it will likely go for voter approval in the form of a referendum.

That was general consensus of the Waxahachie City Council following two workshop sessions Monday night to discuss the proposed library agreement.

While the council is unanimous in its support for a strong public library system, the panel is somewhat divided over how — and when — additional public funds should be used to assist the current library.

The board of directors for the Nicholas P. Sims Library has proposed an agreement for the city to take over the independent, nonprofit library founded in 1898 through the will of Nicholas P. Sims.

During the council’s Nov. 5 meeting, council members discussed the proposed cooperative agreement, which called for the city to fund an $8 million expansion project for the library. Under the initial proposal, the city would take over operations of the library beginning Oct. 1, 2008, with the expansion project funded in 2010.

Financial impact of merger

During Monday’s workshop, the council was provided with an informational memorandum detailing the financial impact a library merger/expansion would have on the city’s ability to provide municipal services.

Currently, the city provides the library operational expenses through an allocated tax rate of 6.3-cents per $100 valuations. In 2006, the tax rate generated $1,040,815 for library operations, which includes personnel-related expenditures.

Under the terms of the proposed merger, all library employees would become city employees and be eligible for full benefits, which include participating in the city’s retirement and insurance program. In the proposal, the library has stated that an additional seven employees will be required to operate the expanded facility once that project reaches completion.

The library currently operates with a staff of 10 full-time employees and five part-time employees.

“While the city added 13 new positions last year, we want to point out that eight were the police and fire departments, four were paid for out of the water fund and one was added out of the general fund,” Assistant City Manager Michael Scott briefed the council. “If you remember during our budget workshop earlier this year, we had pointed out the need to add other key positions but those were taken off the table because we knew there wasn’t enough money in the budget to fund them.”

Scott noted the list of additional positions requested — but not included in the budget — were for a city engineer, an additional building inspector, two more police officers, an additional public works inspector, two more public works maintenance employees and additional positions on the parks staff.

Scott said these are positions needed to meet increase demand for city services and will likely come up for consideration again during the city’s next budget process.“Before you begin deliberation on bringing on 15 library employees and possibly adding another seven employees for the library, we have already said ‘no’ to funding additional personnel needs for other city departments,” City Manager Paul Stevens added.

It was explained that should the city take over operations of the library, an additional $442,217 would be needed at the time of the merger just to absorb the existing personnel costs.

Looking ahead to 2010, Scott said the city’s required contribution to fund the anticipated budgetary increases to operate the expanded library would be $1,825,145 (or in tax rate terms, 8.76 cents per $100 assessed valuation of the city’s property tax rate). He added the figure represents 14.2 percent of the city’s total property tax revenues — assuming an 8 percent annual growth rate.

As outlined in the initial proposal, the city would fund the $8 million expansion project in 2010 through the issuance of general obligation bonds.

At that time, the city is estimated to have a capacity to fund about $19 million in projects through its debt service fund without the need to raise the tax rate.

Scott made two key points:

The architect’s projected construction cost, presented by the library board, is projected to increase to be $10 million in 2010 due to the rising cost of construction. There are a number of needed city projects — including numerous road improvement plans — that will be in jeopardy should the council decide to fund the library expansion.

“Basically, there is no free lunch,” Stevens said. “Yes, we can fund the library expansion project in 2010 without having to increase the tax rate. However, we have already talked about a number of much needed municipal projects — including necessary road improvement plans that we know we’re going to have to do — that are going to be competing for those same funds. That’s not even taking into account other items that may come up between now and 2010.

“And that’s assuming we continue an annual growth rate of 8 percent,” he added. “We bring this up now so you all have a clear financial picture prior to making a decision. We all have been working hard to fund projects within our budget without the need to raise the tax rate.

“We know we have road issues that need to be addressed. At some point, you all are going to be faced with the decision of having to either raise the tax rate or not fund key projects,” Stevens said.

Scott pointed out that should the council decide to issue bonds in 2010 to fund the library expansion, the debt service on that project would equate to 3.76 cents per $100 assessed value.

He also listed a number of projects that are currently highlighted as priorities for consideration for funding out of the $19 million estimated to be available in 2010. Those projects include:

Reconstruction of Grace, Royal and Hawkins at an estimated cost of $3.8 million Reconstruction of Virginia, Cynisca, University, East University, Harbin and Kirven at an estimated cost of $12.6 million Reconstruction of Graham at an estimated cost of $3.06 million Reconstruction of North Gibson at an estimated cost of $1.57 million Drainage improvements in the creeks at an estimated cost of $2 million John Arden Road widening and rehab at an estimated cost of $2 million Sidewalk improvements at an estimated cost of $500,000 Projects as outlined in the parks master plan include new land acquisitions at an estimated cost of $2.5 million Improvements to existing parks at an estimated cost of $2 million The U.S. Highway 77 corridor project to improve traffic safety at a cost of $4.8 million Construction of Fire Station 3 at an estimated cost of $3.5 million City Hall annex project at an estimated cost of $4 million Police station site/construction at an estimated cost of $2.5 million

“These are estimated costs,” Stevens said, noting that exact costs for each project won’t be determined until those projects have been let out for bid. “And this is by no means a comprehensive list. These are just some of the projects that have been identified and discussed as priorities.

“Without question, the library is a valuable asset to our community and the city has had a strong working relationship with the Sims Library for more than a century. But as you consider taking on the full financial responsibility of overseeing the library, we wanted the council to have the full picture, as best we can give it, of what’s coming down the road,” he added.

Taking into account the city’s financial obligations, Scott told the council the city staff has outlined four possible options for handling the library proposal.

“There are probably a hundred other options that could be put on the table. These are just four plans that we wanted to put out there to help in your deliberations,” Scott said, outlining the four choices.

1) Adopt the cooperative agreement with the library as presented and begin the process of the library becoming a city department. Additionally, obligate the city to a 2010 bond issue to wholly fund the capital expansion project with certificates of obligation. It should be noted with this option the city will be required to impose a tax increase in the future to fund other critical projects.

2) Place the decision before the voters of Waxahachie to approve utilizing general obligation bonds. This would allow for the voters to approve a tax increase to fund the capital expenditures of the library expansion. The operations could then be managed on one of the following formats:

a) Increased operational costs could be funded as the library operates as a city department in a similar fashion as described in the cooperative agreement, or

b). The library could remain as an independent entity managed by the library board of directors and continue to make requests each year for funding from the city council.

3). The library board could petition voters to create a library taxing district as provided for in the local government code. This option would require voter approval to create the district and approve the issuance of bonds for the library expansion. It would also require the city charter to be amended in relation to Sims Library as the library board would be granted autonomy from the city.

4). Not change the terms of the current city-library arrangement. The library would be tasked to raise its own capital funds (or portion of) to fund the expansion and then request an increase in the city contribution to cover the anticipated increase in operational costs. The increase in city contribution would then be considered each year along with other general fund requests of city departments.

Council discussion

“I don’t think that any of us in this room want to do anything detrimental to the library,” said Councilor Buck Jordan. “But none of us have a crystal ball that’s going to tell us what’s going to happen in Waxahachie in the next few years. Money is a real object. We don’t know what the next project coming down the pike is going to cost us.

“My response is to put this (library expansion project) to the voters and let the library board continue to operate and maintain the library as it has in the past,” Jordan said. “That way we can take care of the street projects. I don’t think anyone is opposed to the library. But we have seen amazing growth in this town and it’s shocking. And if the housing boom cuts loose again, we’re going to be faced with a lot more needs down the road. A decision needs to be made on the library and it needs to go to the voters.

“As we get into this and we talk about bringing in employees, that is a big, big cost,” Jordan said. “The long and the short of it is I don’t believe we can take that many people in. We’ve just turned down adding several needed positions to other departments. On top of that, every time you turn around we need $2.5 million for this project, $4.5 million for that project — and our streets are in terrible shape.

“In my opinion, we could really be hurting five years from now if we need to fund something that pops up that we’re going to need,” Jordan added. “And our street problems aren’t little projects. They’re going to be big expenditures and we need them. I think we need to go to the voters and let them decide on spending money for the library because if we aren’t looking down the road at what’s coming, then let me out of here now.”

In order to gauge council sentiment, Mayor Joe Jenkins asked for a poll of calling for a bond referendum to let voters decide the library issue.

“Before we get to that point, I would like to talk about the preservation of historic buildings,” said Mayor Pro Tem Ron Wilkinson. “The principal enemy of old buildings is water. If we let one deteriorate, it’s only going to become more expensive as time goes on. At a minimum, I would like us to find money now to stabilize the problems (at the Sims Library building) so that when we do the expansion project in 2010 we’re able to do more with the funds instead of having to spend funds on repairs because we’ve let the building deteriorate. I’d like to see us get the immediate problems (at the building) fixed right now and I think that money will be well spent,” Wilkinson said.

“Help me out here,” Jenkins asked the city staff. “If we go to the people with a bond election, can we have the election now and allocate those funds pending voter approval so we don’t have to wait until 2010?”

Scott responded the earliest a referendum could be called is for the May election. Pending voter approval, funds could be issued in 2008 for the library expansion project.

“However, that would require a tax rate increase,” Stevens added.

Councilor Joe Gallo commented that he has had a difficult time with the issue.

“I’ve thought a lot about this and I just can’t get my head around why we should be doing this now,” Gallo said. “If it looks like we’ll have money available in 2010, I have no problem going to the voters in 2010 and asking them for approval on funding the library over other projects.

“But I’m a firm believer that we need to live within our means. If we don’t have the money now, we don’t tie the hands of future councils by committing to spend money that we don’t have,” Gallo said. “When we get to 2010, we look at the funds available and the needs of the city at that time and then we make a decision. If we feel we need to go to the voters for their input on what projects to spend the money we have available, let’s do it then.”

Jordan said he would be in favor of going to the voters now to fund the project, even if it entailed an increase in the tax rate.

“I do want to see the library taken care of, but I want to see it done by the voters,” Jordan said.

As the discussion progressed, the mayor again stressed the need for street improvements.

“One of the things we can’t take our eye off of is growth,” Jenkins said. “I believe that one of the big issues facing us is our streets. If we proceed with the library agreement, my feeling is to go to the voters and ask them to increase taxes.”

Councilor Chuck Beatty noted he wasn’t in favor of raising taxes.

“We have street projects that we need to tackle first,” he said.

Wilkinson was adamant that whatever course of action taken by the council, the decision be unanimous.

“I think that whatever decision we make, it needs to be a plan that all five of us agree on — especially if that plan entails taking it to the voters,” Wilkinson said. “We need to define it more specifically and make a decision.”

Jordan asked, if the agreement were adopted, would the city assume complete control over the library’s operation?

“It is my understanding that it would be 100 percent operated by the city,” Jenkins said. “The library board would only have management over the library’s trust fund.”

In thinking outside the box, Wilkinson suggested a joint capital campaign between the city and library. Instead of the city funding the full $8 million expansion project, he suggested the library may be willing to invest part of its trust fund for the expansion. At the same time, a community campaign for donations could take place.

“Perhaps the city could fund $6 million with the library raising the rest,” Wilkinson said. “I believe that would go a long way with the voters. I would also like to see, at a minimum, a computerized annex on the east side where children could order books and have them delivered the next day. What I would really like to see is a building in that neighborhood that would serve the needs of residents.”

“So what you’re saying is we would add the cost of an annex building to the cost of the expansion project?” the mayor asked.

“Sure,” Wilkinson replied. “If we are going to ask the voters to fund this project, let’s do this right and accomplish several goals at once.”

Following about 80 minutes of discussion, the matter was tabled to allow the council to adjourn into regular session to conduct city business. At the conclusion of the council meeting, the workshop reconvened to allow additional discussion.

“What we are trying to do is reach some sort of conclusion as to where we go from here and get at least a skeletal agreement,” Jenkins said.

At the end of nearly three hours of workshop discussions, Jenkins said there seems to be agreement on three points:

The need to call for a special election in May asking voters to approve a bond referendum on the library. The agreement would include a facility that would be used as a library extension on the east side of Waxahachie. The library would become a full department of the city.

“There are several things that have yet to be addressed,” Jenkins stressed. “Our reasoning for calling for a bond referendum is that we are not going to be able to take on the library without the need for a tax increase and if we do this now, it needs to go to the voters.

“We could wait until 2010 and tackle this project without having to raise taxes, but there are a number of other pressing needs upon us — namely road improvement projects — that we must get done,” he said.

While a council vote on the issue was scheduled for the Dec. 3 meeting, Jenkins said that is an unlikely target.

“We are not in total agreement,” the mayor said. “We will be meeting again with the library board to discuss this prior to the Dec. 3 council meeting. We will be continuing our discussions. We have to look at how much money we want to go out for and whether or not we want to do this now. There is some feeling among some of the council members that timing is important and the time to do this is now.”

E-mail Neal at neal.white@waxahachiedailylight.com.