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JANUARY 29, 2007 Minutes of the Regular Meeting

ANN ARBOR DISTRICT LIBRARY BOARD
MINUTES OF THE REGULAR MEETING
MONDAY, JANUARY 29, 2007

07-121 I. CALL TO ORDER
President Leary called the meeting to order at 6:00 p.m.

07-122 II. ATTENDANCE
Present: Cahill, Greene, Head, Leary, Murphy, Barney Newman, Surovell
Absent: None
Staff: Davis, Doll, Nieman, Parker
Others: Jim Greene, Dykema
Tom Huntzicker, Kapnick Insurance Group
Ed Ura, Management Resource Center, Inc.

07-123 III. RECESS TO EXECUTIVE SESSION FOR OPINION OF COUNSEL AND LABOR NEGOTIATIONS

07-124 IV. RECONVENE REGULAR MEETING AT 7:30PM
President Leary reconvened the regular meeting at 7:40 p.m.
Secretary Greene was absent from the regular meeting.

07-125 V. APPROVAL OF AGENDA
(Item of action)

Vice-President Head, seconded by Trustee Cahill, moved to amend the agenda to add a new Item as A. under New Business. Resolution 07-133 Resolution to Accept Recommendation from O’Neal Construction to Award Retaining Wall Contract for the Northeast Branch Project.

AYES: Cahill, Head, Leary, Murphy, Barney Newman, Surovell
NAYS: None
Motion passed 6-0.

Trustee Cahill seconded by Trustee Murphy, moved to approve the agenda as amended.

AYES: Cahill, Head, Leary, Murphy, Barney Newman, Surovell
NAYS: None
Motion passed 6-0.

07-126 VI. APPROVAL OF MINUTES OF DECEMBER 18, 2006

Treasurer Barney Newman, seconded by Trustee Cahill, moved to approve the minutes of December 18, 2006.

AYES: Cahill, Barney Newman, Head, Leary, Murphy, Surovell
NAYS: None
Motion passed 6-0

07-127 VII. CITIZENS’ COMMENTS

There were no citizens’ comments.

07-128 VIII. FINANCIAL REPORT

Associate Director Nieman took the floor and reported the following:
As of the close of December, 2006, the unrestricted cash balance stands at 12.5 million. We have received 95% of our budgeted tax receipts. The fund balance is at 6 million.

The expected impact from loss of tax revenue due to the Pfizer closure will not affect our current budget or next year’s budget. 1/3 of the property tax paid by Pfizer collected for AADL is for personal property and when that is not received, we can anticipate a decrease of approximately 170K in our operating budget.

07-129 IX. APPROVAL OF DISBURSEMENTS

Vice President Head, seconded by Trustee Murphy, moved to approve disbursements.

AYES: Leary, Barney Newman, Head, Murphy, Surovell
NAYS: None
ABSTAIN: Cahill
Motion passed 4-0-1.

Vice President Head was excused from the meeting at this time.

07-130 X. DIRECTOR’S REPORT

In addition to the written report, Director Parker emphasized that AADL will be active in the community to provide resources to those who will be unemployed due to the Pfizer closure.

Director Parker spoke of the great experience that she had in Seattle as Director of the Ann Arbor District Library because our library is considered cutting edge in terms of access. We are also seen as setting new standards for staffing models that develop and use resources with an emphasis on technology to enhance and expand access. Director Parker expressed her pride in IAS and the work that is done by that department under the leadership of Eli Neiburger.

Director Parker also reported that the AADL will enter into a two-year contract with BLogistics to resell discarded library items that are not selected for sale by the FAADL. AADL will receive 50% of net from the sale of this material. BLogistics will sell print material, books-on-CD, and DVD’s. Discarded books-on-cassette and videocassettes are donated to Recycle Ann Arbor for resale in their store. The contract with BLogistics is an effort to meet our organizational goals in the strategic plan. We hope to significantly reduce our recycling fees while realizing some return on the investment in our collection.

Trustee Cahill referred to an AA News January 20, 2007 article that stated that the DDA would support a new library on the Library Lot and that they would provide as many as 500 parking spots. Director Parker stated that she has not had any conversations with DDA members, but was pleased to read that the DDA would fund a public parking structure for the Downtown Library.

Trustee Murphy asked for a report on the Community Read event with Tracy Kidder. Director Parker reported that the event was attended by over 650 persons and many persons who arrived late were turned away. The event was held at the WCC auditorium and it is likely that the event will require a larger venue next year. The Read is a collaboration with the Ypsilanti District Library, the Ann Arbor News, the Ann Arbor Public Schools, EMU, UM and Washtenaw Community College.

The theme of the Read is “We the People” and focuses on citizenship.

07-131 XI. OLD BUSINESS

06-125 A. UPDATE ON NORTHEAST BRANCH

Ken Nieman Work on the underground utilities is progressing. It will be hard to see progress until the project is out of the ground. The schedule is still indicating an opening late spring of 2008.

07-024 B. UPDATE ON STATUS OF FRIENDS OF THE ANN ARBOR DISTRICT LIBRARY
Josie Parker

Director Parker welcomed Eric Owen, President of the FAADL and new FAADL board member Ruth Hastie. Director Parker reported that the FAADL expects a completed audit by the end of February. They will hold elections in May to elect a new board. They have had several meetings and are working towards revenue and expense projections for the current and upcoming year. FAADL has taken the AADL requirement of a donation of 80% of gross seriously, but do not feel that the amount can be accomplished in this year or in the upcoming year. The FAADL has requested that the interim agreement be extended until June 30, 2006 with the understanding that their audit must be completed and reported without material weaknesses.

The new board of the FAADL will have more information about financials and management structure and is expected to work with AADL to establish a long term arrangement for space in the library and establish a determined amount for a financial contribution to AADL. The interim agreement allows for a month-to-month extension, but not a longer term extension. The agreement also requires the FAADL to make a financial contribution to AADL during the interim period and Eric Owen has assured Director Parker that a donation will occur. Director Parker stressed the importance of the FAADL donation to fund summer reading and the importance of receiving the funds as soon as possible because planning for summer reading has begun. FAADL funds have traditionally funded programs and services that the Library typically does not or is not allowed to fund with tax dollars. AADL has not received any funds from FAADL during this fiscal year and this created a hardship. AADL scaled back programming and publicity for the year to adjust to the loss in revenue. Donations were solicited and received from other donors to fund high profile and key events and programs.

Based on discussions with FAADL President Eric Owen, Director Parker asked the Board for authority to extend the agreement until June 30, 2007 with the following condition: That the FAADL audit is received on or before February 28, 2007 and does not contain material weaknesses.

Trustee Cahill commended the FAADL for the progress made in clearing up their financial and management oversight problems and stated his support of the extension of the interim agreement.

Trustee Surovell asked the following clarifying questions:
Is it true that monetary donations have not been made to the AADL during the interim period?
Is it true that the FAADL has not indicated when donations will
resume?
Is there an indication that donations may not occur in this fiscal year?

Director Parker indicated that donations have not been made from FAADL to AADL. No date for the resumption of financial donations from FAADL to AADL has been offered. The FAADL President has given his word that a donation is intended.

Trustee Surovell asked if we had received or been shown the current financial projections, revenues and expenses, or financial control mechanisms that are current for the FAADL? Director Parker answered in the negative. She has not received nor has she seen any documents that relate directly to cash handling or revenue/expense projections.

Trustee Surovell stated that before we enter into an agreement more extensive than month to month we must receive a commitment that will be meaningful to us and one that allows us to receive some of the funds that we ordinarily receive from FAADL. In the absence of that, we would need to revisit our understanding of what is occurring within the FAADL to restructure its operations.

Trustee Murphy stated that she felt that an extension to June 30, 2007 would be a show of good faith. Trustee Cahill concurred.

Trustee Surovell clarified that his concern was not centered on extending the agreement or not, but on the obligation of AADL to recognize the interim agreement with the FAADL as a business arrangement. AADL should exercise its right to receive documentation from FAADL indicating how expenses are being trimmed, what the revenue projections are at the moment, what measures and controls are in place going forward, and how and when the FAADL will resume its financial contributions to AADL.

Treasurer Barney Newman cautioned that it might be very difficult for the FAADL to experience and recover from an upheaval in their organization at this time due to the amount of work required to prepare for an audit covering six years.

President Leary stressed that the library directs resources to support the FAADL and makes an investment in the FAADL on a daily basis, and she too would like to see the revenue and expense report and projections and plans for budgeting for the future before deciding to extend the interim agreement.

Director Parker clarified her understanding of the Board’s need for more information from the FAADL on their financial status including revenue and expense reports, budget projections for the current year and the upcoming year, and the terms in which financial donations from FAADL to AADL will resume. She stated that this has been a very difficult time for all concerned and she appreciates the support of the Library Board in authorizing her to act on its behalf in negotiating an agreement with the FAADL.

The interim agreement remains in effect without an extension.

07-132 XII. NEW BUSINESS

07-133 A. RESOLUTION TO ACCEPT RECOMMENDATION FROM O’NEAL CONSTRUCTION TO AWARD RETAINING WALL CONTRACT FOR NORTHEAST BRANCH PROJECT

Trustee Cahill, seconded by Trustee Murphy, moved the Resolution 07-133 to Accept Recommendation from ONeal Construction to Award Retaining Wall Contract for the Northeast Branch Project.

AYES: Cahill, Leary, Barney Newman, Murphy, Surovell
NAYS: None
Motion passed 5-0.

07-134 B. VOTE FOR EXECUTIVE SESSION FOR OPINION OF COUNSEL AND LABOR NEGOTIATIONS

Trustee Murphy, seconded by Trustee Surovell, moved to vote for an executive session at the next regularly scheduled Board meeting for Opinion of Counsel and Labor Negotiations.

A roll call vote was taken:

AYES: Cahill, Barney Newman, Leary, Murphy, Surovell
NAYS: None
Motion passed 5-0.

07-135 XIII. ADJOURNMENT

Trustee Cahill, seconded by Trustee Murphy, moved to adjourn.

The meeting adjourned at 8:40 PM.