AADL Board Meeting - November 18, 2019

[00:00:04.20] SPEAKER 1: Ann Arbor District Library Board of Trustees Meeting.
[00:00:08.08] LINH SONG: Let's call this to order. Good evening, everyone.
[00:00:11.58] JAMIE VANDER BROEK: We're very enthusiastic over here.
[00:00:14.45] JOSIE PARKER: Here she is.
[00:00:15.42] LINH SONG: Great. Karen, do we have attendance?
[00:00:20.82] KAREN WILSON: We do.
[00:00:23.19] LINH SONG: Can I get a motion to approve the agenda?
[00:00:26.25] S. KERENE MOORE: Motion to approve the agenda.
[00:00:28.38] JAMIE VANDERBROEK: Seconded.
[00:00:29.52] LINH SONG: Great. All those in favor?
[00:00:31.53] ALL: Aye.
[00:00:33.13] LINH SONG: The consent agenda, can I get a motion to approve the consent agenda?
[00:00:36.30] COLLEEN SHERMAN: So moved.
[00:00:37.31] S. KERENE MOORE: Second.
[00:00:37.98] DHARMA AKMON: I second.
[00:00:40.08] LINH SONG: Great. Any discussion? Great. All those in favor?
[00:00:44.74] ALL: Aye.
[00:00:45.86] LINH SONG: OK, thank you. Karen, do we have any citizens' comments for tonight?
[00:00:51.06] KAREN WILSON: We do. Scott [INAUDIBLE]?
[00:00:54.56] LINH SONG: Great. Scott, can you come on up please?
[00:00:56.64] JOSIE PARKER: Did you want to do it in front?
[00:00:57.81] SCOTT: Oh, I meant to put it up at the end tonight.
[00:00:59.81] LINH SONG: Oh, for the end. OK.
[00:01:01.55] KAREN WILSON: OK, we'll put you to the end, then.
[00:01:02.66] LINH SONG: Great. OK, great. So moving on to financial reports with Josie, please.
[00:01:10.24] JOSIE PARKER: Thank you. And financial reports begin on page 13. And go through 17. This is a continuation from last month when we met and you had a quarter's worth of financial reports. So this follows through and shows you your cash, your tax receipt as of October 31 first is 95.4% of what's expected. And your fund balance activity-- and there is an agenda item regarding fund balance this evening that's a recommendation that the auditors have made about moving money from the fund balance to the capital fund. So that's part of this evening's agenda.
[00:01:53.84] And the narrative talks about the revenue, new tax receipts, and the expenditures-- what the prepaids have been-- the total cash expended through October equals $5,976,034. The revenue over-under we are fine, 33.8% of budget at this point in time is close to where we expect to be. The two grants that are being carried forward are listed down below. So you can see those. And then on page 15 is the statement of revenues, expenditures with changes. It includes the column with the year-to-date percentages that we showed that we were adding to our financial reports to try to indicate where we were looking in the year. If there are any questions about the financial reports, I will do my best, through 17 where the balance sheet is.
[00:02:54.86] COLLEEN SHERMAN: I have a quick question on the narrative. Negative revenue for the month of October in library fines, fees, and others is a result of reclassification. Can you elaborate on that?
[00:03:05.24] JOSIE PARKER: Yes.
[00:03:05.60] COLLEEN SHERMAN: Thanks.
[00:03:06.23] JOSIE PARKER: Reclassification is at some point in the process of classifying an expenditure in the documentation. The software we use, we put it in the wrong place, and so it was-- we reclassified it so that we could get it to balance.
[00:03:23.29] COLLEEN SHERMAN: OK. Is that shown in any particular line on page-- on any of these three pages?
[00:03:30.40] JOSIE PARKER: It probably is, Colleen.
[00:03:31.73] COLLEEN SHERMAN: OK, no sweat. I was just looking.
[00:03:34.49] JOSIE PARKER: It probably is. And after the meeting, I can ask someone else who is--
[00:03:38.16] COLLEEN SHERMAN: No sweat.
[00:03:38.74] JOSIE PARKER: OK. All right.
[00:03:41.32] LINH SONG: Great. Any questions for Josie on the financial summary? No questions? All right, great. Moving on. Thank you.
[00:03:54.89] JOSIE PARKER: Thank you.
[00:03:56.54] LINH SONG: Executive committee. We met prior to the meeting tonight. It was just Kerene and I. Trustee Leija's out for the evening. And we just reviewed a couple of things that have happened since we last met. We talked a little bit about the staff day this past Monday and how that went. I was-- I couldn't make it, so it was really nice to hear that everyone was able to make it in the snowstorm, so kudos to the library for committing to coming through on that day. That was a tough day to travel or not travel. You were here all day.
[00:04:30.28] JOSIE PARKER: We were here all day.
[00:04:30.94] LINH SONG: Right. And we also talked about-- little bit about what we'll be reviewing later tonight, which is us coming out of closed session and the feasibility study. So we did a quick review of that. What else did we cover, Kerene? It was a quick kind of quick meeting. I think a little bit about strategic plan coming up for end of year, trying to figure out just end of year work before we meet again next month.
[00:05:03.34] S. KERENE MOORE: Right.
[00:05:05.75] LINH SONG: Did we miss-- did I miss anything?
[00:05:07.21] JOSIE PARKER: No.
[00:05:08.23] LINH SONG: Great. So executive committee, moving on to budget and finance committee.
[00:05:14.58] COLLEEN SHERMAN: We met on Halloween, and it was very scary. Victoria and I met with Dave, and it's Dan?
[00:05:22.74] KAREN WILSON: Don.
[00:05:23.46] COLLEEN SHERMAN: Yeah, Don from Yeo & Yeo, and they gave us a preview on what we're going to hear from Dave this evening. We also talked at length about a very generous gift from the Ladies' Library Association. Do you want to talk about that, or--
[00:05:38.71] LINH SONG: Sure.
[00:05:39.57] JOSIE PARKER: You were asking me?
[00:05:41.38] COLLEEN SHERMAN: Yeah it was--
[00:05:42.21] JOSIE PARKER: I can. The library has been talking to the ladies for about six months about a gift that would be a significant one from them to help fund the addition of screen in the lobby-- that is, a digital screen that could run 72 hours a week without going off, without turning off. The screen could be used for digital art exhibitions that are local as well as international and national, and would also be used when we have speakers or events up behind that speaker or event so that people could see. And it could be internal promotion to anyone in the library about what's coming up pretty much the way you see this.
[00:06:33.36] The screen that we are talking about is a half million dollar screen, and so we spoke with the Ladies' Library Association about a quarter of a million dollars in a donation, and they agreed. They thought it was a great idea, a great use of their funding. They had wanted an exhibition space in the downtown library that was more significant than those which we are currently able to provide, and they see this screen as that space. And so an anonymous donor had spoken with us about a match, so we have the half a million dollars to do this, and so will be going forward in the early part of the year. So many thanks to the Ladies' Library Association for agreeing to do this. We're happy about it. It should be pretty exciting.
[00:07:26.40] VICTORIA GREEN: And I just want to give a shout out to the Ladies' Library Association for doing something that is in line with the way they want to support the library, but is a new idea.
[00:07:34.05] JOSIE PARKER: It is.
[00:07:34.45] VICTORIA GREEN: And that's fabulous.
[00:07:34.99] JOSIE PARKER: It is. And it's a significant amount of money for them as well.
[00:07:41.16] COLLEEN SHERMAN: I spoke with Jan Barney Newman last week and she is incredibly excited about this gift, and I'm so excited that the group decided to do it collectively. So those were our two major items, and again, that was Halloween. And on to the races, on to what's next. Does anyone have any other comments or questions?
[00:08:04.51] LINH SONG: Great. Thank you. Director's Report, Josie.
[00:08:07.87] JOSIE PARKER: So I apologize for not getting it into your bound report, but you have it in front of you in paper, and it's for branch opened on November 12th. Traverwood branch will close on December 16, and it will be our longest closure. It will be a 10-week closure, and it's because of the type of work that has to be done there. It's different from other locations. So this is the square. This is showing the meeting room, diagram of the one bookable room that we can add to Traverwood, so it will be one bookable room, not several the way we've been able to do elsewhere. It's just about the way the library is designed.
[00:08:45.49] Those floors have to be refinished routinely. Not annually, but routinely, so this will be an opportunity to sand down and reseal those floors, which they're wooden floors. The big doors to the program room have been problematic since day one. They swing, and they're heavy. And so you can get bumped hard. And if you're a little person, hard is relative, right? So we wanted to change those. It turns out that that is a major part of this project, because we need certain structure up above them to change how they're in place. And so that's going to be a lot of work, and that's what takes-- this what's going to take longer.
[00:09:32.63] So at Traverwood-- at Pittsfield, if you go in, you'll see the glass isn't up. We did move the Bernoulli to the youth area and we surrounded it with the iPads. And it's such a hit, kids love it. So the Bernie-- as we call it-- is down in the noisier part of the library now, not near where the meeting rooms would be. And the glass isn't up. The glass is going up-- I'm looking for him.
[00:10:00.74] ELI NEIBURGER: I don't think we have a date yet. We're still waiting for it to come out.
[00:10:02.58] LEN LEMORIE: We're still waiting on a date. Probably in four weeks.
[00:10:05.26] JOSIE PARKER: OK. We require the glass to be what is called fritted. So when you look at the glass in our buildings and you see that mark across them, the lines or the shadow, the white shading, that is not a piece of plastic that's been applied that can be peeled off. It's actually-- it's blasted. I think it's sand. It's sand, isn't it, that does fritting against the glass? It takes-- they have to do all the field measurements, they have to get the glass cut, the glass has to go out for the fritting and come back and then be put in. It takes longer because of what we require.
[00:10:46.81] And the reason we do this is, it's permanent. People can't sit there and peel at that plastic, which you know they would do. And so then it would be a problem. So that's what-- there's a delay in that. And as soon as the glass is up, the booking will be started. And the Ann Arbor Synth Expo occurred on Saturday, November 9, the same day as the ballet-- which was amazing. And this is the space downstairs that we're now calling the Secret Lab Annex, which is the space in the basement that we-- the Friends of the Library Board were so gracious about understanding how we needed more space to have additional public space.
[00:11:34.84] So you see how we have started to use it. That day, they had soldering irons set up for people to work on a public synth, that at the end of that day, they played. And I'm not sure how successful it was, but it worked, so it was a fun--
[00:11:51.30] ELI NEIBURGER: There were blinking lights.
[00:11:52.22] JOSIE PARKER: There were blinking lights. So it did work. So it was a lot of fun. So that's the space. I would like to say that same day was the event with the ballet, and we had 500 people at the ballet in the lobby. It was quite a day at the library. And following it, on Sunday, was the Fifth Avenue Press release of nine books. And there were six-- there have been 16 total releases in 2019, and these nine books were released that day. I listed the authors for you in the Director's Report for those of you who are curious about the names of the authors. It's a little hard to see all the authors, but they're in my written report.
[00:12:36.79] And then this is a summary of comments. We celebrated Bob Ross's birthday with another paint-along, and you can see here smiles were-- smiles all around for Bob Ross's birthday. Our friend Britain-- who once long ago-- worked here as something we called the techno host, which we don't have anymore-- showed his AADL pride in chilly Salt Lake City wearing his exclusive AADL summer games scarf. I'm sorry. And this is Halloween-- another amazing set of story times and trick or treating at the downtown library. We do it twice that day because we have so many children show up, and it was always a good fun day.
[00:13:19.68] Changes of scenery are great, and we have five places people can switch things up. Here we have a visitor to Traverwood and one to Westgate, and they both seem pretty happy with their choices. They're talking about being able to go somewhere and switch up their scenery from where they work or where they live. A special shout out to the AADL for offering art tools to make procrastination activities successful. And photos and a comment showing all the fun that was had at the Ann Arbor Synth Expo, and more than 500 attendees of all ages took in the live performances and tried out some of the AADL's instruments. And this was going on right in the same day as the ballet.
[00:14:05.51] Actress and comedienne Debra Wilson visited us in early November and she shared a tremendous wealth of knowledge and experience in a program titled "The Art of Voiceover and Performance Capture." Her work has been showcased on everything from Mad TV to Avatar, World of Warcraft, The Simpsons, and tons of AAA video game titles. You can see people were happy.
[00:14:27.98] More than 400 people of all ages took in the Academy of Russian Classical Ballet's performance of "The Nutcracker," including this little cutie. Finally, Friday Night Stories this last Friday night. I have to say, I have worked here 20 years, and I have not been to a library event where the mood of the room was as positive and uplifting and fun as Friday night stories here at the library, recognizing the lifetime contribution of Laura Rayner to this community and this library, and having a celebration-- that she wouldn't let us call one-- for her retirement on the same evening. And that is Laura sitting in the middle of the stage with a lumberjack. And we ended the evening with "Knees Up Mother Brown," which I'm not going to make you all do. And it was such a fun night.
[00:15:30.86] And if you ever had a doubt in your mind about the impact of all of our storytelling, we are going to show you a little clip that someone put up and Rich found, and I'm going to let that happen now.
[00:15:44.66] [VIDEO PLAYS]
[00:16:20.15] They are playing AADL Storytime. It does not get better than that, so thank you.
[00:16:30.98] LINH SONG: That's a wonderful thing. Do we have any questions for Josie? Any questions? Seems like the monthly bye. We were a polling station too, for the election, were we not?
[00:16:45.11] JOSIE PARKER: Oh, yes. We were a polling station at Pittsfield, and even though we were closed, we managed to make that happen, and we were a polling station downtown as well, in this room, for fifth ward or district 1, or-- I think that's right.
[00:17:04.16] LINH SONG: We are many things. Thank you, Josie. So no questions for Josie? OK, great. Moving on, old business. Len, update on our construction projects.
[00:17:18.63] LEN LEMORIE: Yes, good evening. As Josie mentioned, we've reopened Pittsfield, and we are currently working out or ironing out all the details for Traverwood. It is a much larger project than Pittsfield, so we want to make sure we get everything in order before we start. We've been looking at, and working on bids for HVAC replacements in this space. This room is controlled by one air handler, and it is on the fritz. It's been that way a couple of months, so we've been working on cost to replace that and cost to replace the units, or take the secret lab of the house system. So we have some numbers. We'll give them to you in January, hoping to get that going. We want to make sure we've done all of our homework on that.
[00:18:04.79] And then we do have rough budget numbers for the generator projects, which we've talked to backup power at the branches quite a bit. We'd like to get approval tonight to go to bid for that. Now these are preliminary numbers. We need to get electrical engineers involved to go through all the sites to make sure we're doing everything, and everything's sized properly. So we'd like to get approval for that tonight, and that rough budget number for that project right now is actually higher than I mentioned a couple of months ago. It's at $820,000 for all locations.
[00:18:39.27] JOSIE PARKER: So pretty much what we need is a nod once you answer questions, because there's not a resolution--
[00:18:44.58] LEN LEMORIE: No, there's not--
[00:18:45.13] JOSIE PARKER: To go to bid. It's just more of a-- you're willing to let us take it to bid to see where we can get the numbers.
[00:18:52.97] LINH SONG: And when you said all locations, but all locations except for downtown.
[00:18:56.05] LEN LEMORIE: Except for downtown. Downtown, we do have a 50-kilowatt backup generator, but it is strictly for our server room. It keeps the website up. If we lose power, the unit it would take to power the downtown library would be very large, probably 300 kilowatt or bigger, guessing. And everything is underground downtown as well, so we don't have trees falling on lines, things like that, whereas the branches-- the outages we see-- it's kind of across the board at the branches. And even since we've met the last time, we had another one-- it was either last Friday or the Friday before-- we closed Traverwood early. It was another outage from an underground transformer in the area. If we had this, it would have come online. We'd have been able to stay open.
[00:19:39.66] LINH SONG: How are you prioritizing the branches?
[00:19:42.57] LEN LEMORIE: Really, by failure. I'm going to say this. And, you know, I would say, if in were my opinion, be Malletts Creek. Right now, Pittsfield, Traverwood, then Westgate. And that's kind of where we see the issues. And it does depend on the time of year and the storm, but that's kind of-- the issues we see are kind of in that order.
[00:20:03.25] LINH SONG: OK.
[00:20:04.08] LEN LEMORIE: And we did-- part of the reason that number is higher, it is a rough budget number, so we've kind of looked at all branches as if they were equal, which they are not. But when we remodeled Westgate, we did some of the infrastructure for this, so that cost will be much lower.
[00:20:19.48] VICTORIA GREEN: So that was one question I was going to have is that will-- if we go out to bid, will we get one bid and we'll have a choice of doing it all for that bid, or will it be modular and we can decide to phase it?
[00:20:29.64] LEN LEMORIE: It will be one bid as far as a total number, but yes, they need to break the branches down, because if we choose that, hey, we'd like to do these two or these three and leave this one out, then we would have that option for sure. Yes, everyone-- all the branches will be broke out, because they're unique in their own ways. The gas load at Malletts Creek is much lower, but the electric load at Traverwood is much higher. They're all different in their own way. So the costs when they come back, they'll be-- the size of the generators might be a little bit different.
[00:20:59.61] DHARMA AKMON: Will you-- excuse me. Will you also be able to provide numbers on how much you think that will save in damages?
[00:21:08.97] LEN LEMORIE: Yes, I think we can. It is hard to tell, because we find out we had an issue long after a storm occurred. We could claim some of this on our insurance, but they require us to report that within 48 hours. A lot of times-- if you look at a chiller, there's four compressors on that. One will fail, so the other three have kept us going. We won't see that failure for a while, and then we can't prove it was part of that last storm. So it makes it difficult. But I mentioned a couple of meetings ago, last summer it was about $25,000 just for Malletts Creek to replace two of the compressors out of four on that unit.
[00:21:49.96] LINH SONG: Any other questions for Len?
[00:21:51.85] COLLEEN SHERMAN: Is there any way you can give us a ballpark of the number of days we're actually down per year? I know that's a--
[00:21:58.84] LEN LEMORIE: It's a partial number. I think Malletts Creek, I'm guessing probably issues-wise, because we stay open. We try to stay open. If the lights are on, if it's sunny outside, we stay open whether we have power or not. Because we do have backup power that'll last a little bit. So we have outages where we absolutely stay open. The Traverwood that was a week or so ago, we're in that time of year where it gets dark at 5:00, 5:30. So we had to make that decision. We closed a little early, not a lot. But I would say Mallets Creek is probably-- in the course of the year-- 10, 12 times, probably. Traverwood's probably something like six or eight. And Pittsfield's on the incline, so I would say Pittsfield is closer to eight or 10 times a year as well.
[00:22:42.65] COLLEEN SHERMAN: That seems substantial.
[00:22:43.98] LEN LEMORIE: Yeah. Westgate's different because it's a strip mall. We experience issues that are power-related, but we can't tell if it's either the supplier or if it's a mall problem, either. Because another suite could have an issue. We could glitch out too, so that's why that's one-- that's on the lower end of our priority.
[00:23:02.03] VICTORIA GREEN: So I do want to echo what Colleen said. I think it would be a good idea for us to have the figures about what we're buying if we spend the money in fact. Like, what the impact has been both on closures, but also on the impact on the patron and the staff experience. I mean, if we have cases where we've been open and it feels like there's been no impact on the patrons, but if it's putting our staffs at risk of any sort of thing, that that should be part of the decision-- that should be a factor into the decision-making process.
[00:23:28.48] JOSIE PARKER: I can answer that. If the bathrooms are dark, we're closed. That's a given. If there is no light in the bathroom, if the bathrooms are dark, we're closed. The other thing to remember is often, when these power outages happen, the whole neighborhood's out. So if we have generators, we have heat or we have air conditioning or we have light. And that's part of why we would like to do this.
[00:23:58.26] LEN LEMORIE: Yeah. So if Malletts Creek goes out.
[00:24:00.78] JOSIE PARKER: If Malletts Creek's out, the whole neighborhood's gone out.
[00:24:02.26] LEN LEMORIE: Yeah, everyone-- there's like a little pie over by Mallets. If we go out, everyone around us can come recharge phones, recharge laptops, use our Wi-Fi, that type of thing. So there's an impact of what we feel, but there's also an impact of what patrons or even our community feels around us.
[00:24:19.22] JAMIE VANDER BROEK: Yeah, I think that's an even bigger reason to do it. I think, like, personally, there were a couple of days without power like maybe two years ago on the west side, and that Westgate had power was significant. Yeah right
[00:24:37.13] COLLEEN SHERMAN: So what's the lifespan of what we're planning to buy?
[00:24:40.67] LEN LEMORIE: A good commercial generator's going to last you just like HVAC equipment, about 20 to 25 years. You can-- there are less expensive models that are 10 to 15 years, but that's not something we'd probably recommend. When we do this and go to bid, it's going to be something that either municipalities or large box stores, they use, and use regularly. You know, there's a few makers or manufacturers out there that hospitals use, that type of thing.
[00:25:06.77] LINH SONG: Are there warranties for these?
[00:25:08.17] LEN LEMORIE: Oh, yeah. Yeah. And we have our full service maintenance agreement or mechanical agreement. This would be added to that, so these maintenance techs that come in and service all of our HVAC equipment, they would also be servicing the generators as well. The unit we have here's is a Cummins, which is a-- it's a large diesel unit. It's a good unit.
[00:25:30.62] LINH SONG: Great. So, do you need like a universal nod, or--
[00:25:35.90] LEN LEMORIE: Well, just approve-- yes. We would like to-- again, this is a very rough number. We had talked about a lower number before, but without electrical engineers really looking at it and inspecting something for each building-- which again, they're all different-- it kind of skyrocketed a little bit. We'd love to bring you something realistic, but to do that, we need approval to go to bid for it.
[00:25:56.03] LINH SONG: Sure. I think we're all in agreement. Yes.
[00:25:58.43] COLLEEN SHERMAN: I nod.
[00:25:58.97] DHARMA AKMON: Do it.
[00:25:59.45] LINH SONG: Yes.
[00:25:59.87] LEN LEMORIE: Very good.
[00:26:00.83] LINH SONG: Can you tell us what the timing is again?
[00:26:03.48] LEN LEMORIE: So I would like to bring this back for resolution in January, if possible.
[00:26:09.12] LINH SONG: Great, sounds good. Thank you, Len.
[00:26:11.18] LEN LEMORIE Thank you guys.
[00:26:11.99] S. KERENE MOORE: Thank you.
[00:26:13.64] LINH SONG: OK, moving on. Our auditor's report, so Dave, from Yeo & Yeo.
[00:26:21.62] DAVE YOUNGSTROM: Good evening, everybody. First, thank you on behalf of Yeo & Yeo. We're really pleased to report your June 30 2019 financial statement audit tonight. Awesome. Well, first is it's our first year out here. We're really excited to be here. Obviously, first years are pretty challenging, and you guys had a lot of challenges this year. But again, I think we overcame a lot of that and here we are presenting this audit, and really in a timely manner, so I'm pretty excited about that.
[00:26:50.66] I'd like to thank Josie and the entire staff for all their help getting us here. I mean, it's never easy. We're asking lots of questions, but we got a lot of good answers, too. We had a lot of good results, too. You should be really, really proud of the year you had.
[00:27:03.57] As Colleen mentioned a little bit earlier, we met on Halloween. Some people had costumes on. We were just-- go as accountants, but that's who we are. But it's scary enough sometimes when the auditors are there, they say. But we went through everything in really a lot of detail. We went through the report. It's a long, thick report, and again, went through all the details in that, making sure we answered all the questions the finance committee had for tonight. And we're bringing you a summary tonight of some slides and some highlights that we can talk about. OK?
[00:27:29.65] The first slide, talking about our-- what you're hiring us for. You're really hiring us to audit your books, but also issue an opinion on the financial statements. And we were issuing what's called an unmodified opinion. It is the highest level of insurance we can get it's a clean audit, and your financial statements are properly stated and generally accepted accounting principles. So that's what you're looking for, free of material misstatements, really, really, good stuff.
[00:27:51.05] COLLEEN SHERMAN: This is where we clap. It's good news.
[00:27:54.16] DAVE YOUNGSTROM: I don't get applause very often, but hey. So I thought a little bit about where the revenue is, and obviously, we get a lot of our money from our community. And that's why we talk about the community. And all the presentations you're talking about today is supporting our community. And the tax dollars were up 94% this year, which is a big part of it, part of what we get.
[00:28:10.19] Our revenues are up about 4.4% compared to last yeah, so that's a good thing, up to 17.2. And I have a slide following this that has the prior year numbers just as a sort of point of reference. And our taxes were down about 1% in total. Our state aid, that money comes from the state of Michigan. It was up about 1%. Our other, which is really donations, rentals, and some fees that we charge, was down about 1%, and our interest income was up 1% as well. So it's just kind of a small shift in what we do. Obviously, we're very well-supported. And there's the prior year, just for a point of reference to see where we were working at.
[00:28:42.98] So where do we spend our money at? Again, probably no surprise to all of you here. Personnel, 60% of it, up about 2% from the prior year. Purchased services, about 8%, pretty consistent from one year to the next. We spent a little bit more on repairs, and we're doing a lot of construction and things like that, so maintenance tends to go up sometimes along with that. That was up about 1%. Rentals were up about 1% as well. Our operating costs were up 1%, and our capital was down about 2% this year. We'll talk a little bit more about that in a bit.
[00:29:13.97] One thing we did last year, and I think it's on your agenda tonight. There was a transfer a year ago. It was about 3% of our total expenditures-- were transferred a year ago. We did not transfer this year, and I think we oughta transfer that tonight or maybe take a resolution to look at it. But that was about 3% a year ago. You can see that's that piece of pie down there at the bottom right there, that purple one.
[00:29:33.86] So the board adopts a adopts a budget every year, and that was kind of like the report on the budget, because that's what you see. And I think what you can see is the information you're getting, we didn't really-- we didn't have any journal entries, so what you're seeing on a monthly basis is what you're getting in your financial statements, you can feel pretty good about that. Then taking a look at our final budget, which is our actual amount, you can see, our revenues are very close, about $290,000 different, really 1.7 of your budget, so really is a pretty small percentage.
[00:30:00.60] The expenditure side was under budget by about 1.2. The biggest piece of that, the capital right there. And all of our expense categories were under budget, but that one's the biggest. And again, some of that's timing difference. We had a lot of projects. We did some other capital projects one this year as well, so you have capital projects done for some of that. So some of those dollars were spent there. But we're a June year-end. A lot of our construction happens in the summer. So some of those projects happened over the rest of summer, and into what you guys probably talking about today, those are probably done. So it's just really a timing issue there.
[00:30:28.05] I kind of went back five years and looked at first year, but I always kind of like to learn about what I'm talking about so I have a little bit of point of reference. And you can see, other than '15-'16, all the years are pretty consistent, revenues-expenses pretty close. We did some-- we purchased some of the building, and down here in '15-'16, which was a big change there. You see those expenditures being way up there. And then at the three years, we've had three really strong years after that where our revenues have exceeded our expenditures. And you can just kind of take a look at that, just over time. It kind of tells a story of where you've been.
[00:30:57.62] LINH SONG: That's the story of Westgate.
[00:30:59.25] DAVE YOUNGSTROM: That's the story of Westgate. The story that tells is again, you can see, this is your fund balance. You can see where you were at in '14-'15, where you spent that down to '15-'16, and you've been slowly building that back up over the last several years. You got a really good trend going back. I mean, it's a healthy trend, but you're still not where you were in '14 and '15. So again, when you're at that point in time, again, a little financially stronger, obviously a much better operation than we did back then, I think.
[00:31:24.84] JOSIE PARKER: If I'm not mistaken, that is the summer that we bought the Ann Arbor Public School's interest in this building, and so used fund balance, and it was several million to do that.
[00:31:35.83] DAVE YOUNGSTROM: Definitely was. That's a question we asked. Haven't talked about that yet. So again, building in the right direction. Again, gives you a lot of opportunities to do a lot of the cool things that you guys are talking about tonight.
[00:31:48.33] So with all the challenges you had, you know, we can talk about the numbers. That's all my numbers discussion for right now, but we also look at your internal controls, and we test for state compliance. Because you're a government agency, you have to submit your documents to the state of Michigan. And with all the changes and challenges you had this year and all the things we have going on, you have no material weaknesses in your internal controls, no significant deficiencies, no management comments, and no compliance findings. So it's a really clean audit.
[00:32:12.98] And really, that's what I really have for you guys tonight. Are there any questions I can answer?
[00:32:23.10] COLLEEN SHERMAN: I'm good.
[00:32:25.07] DHARMA AKMON: I'm happy.
[00:32:26.01] JAMIE VANDER BROEK: Thank you.
[00:32:26.13] JOSIE PARKER: I have one. I'll ask a question. There's been discussion regarding accrual accounting and accrual representation and how we must do that rather than a cash accounting presentation. Can you just reiterate that accrual accounting and accrual presentation is what's required?
[00:32:47.31] DAVE YOUNGSTROM: Yeah it follows general accepted accounting principles and also what the state of Michigan allows. You have your information that we submit to the Department of Treasury, so they're further requiring a gap basis financial statement.
[00:32:58.17] JOSIE PARKER: Thank you.
[00:33:02.03] LINH SONG: So this is your first year working with us.
[00:33:04.06] DAVE YOUNGSTROM: It is.
[00:33:06.64] LINH SONG: Thank you. This is quite an endeavor. Thank you for working so closely with staff and with our committee, with our finance committee. Congratulations.
[00:33:18.52] JOSIE PARKER: Thank you for helping us.
[00:33:20.19] DAVE YOUNGSTROM: It's our pleasure.
[00:33:21.04] LINH SONG: We passed. We passed, so we'll see you--
[00:33:22.90] DAVE YOUNGSTROM: Next year.
[00:33:23.24] LINH SONG: Next year?
[00:33:24.07] JOSIE PARKER: Yes. That's what we're recommending that we follow through, yes.
[00:33:27.64] LINH SONG: Fantastic. We'll keep up the good work. I trust we will.
[00:33:32.60] DAVE YOUNGSTROM: Thank you very much.
[00:33:33.31] LINH SONG: Thank you.
[00:33:34.06] DAVE YOUNGSTROM: Have a good day.
[00:33:34.66] LINH SONG: Thanks, Dave. Safe travels. Fantastic. A clean audit. Let's see, let's see, moving on to a resolution to accept the 2018-'19 financial audit.
[00:33:53.17] COLLEEN SHERMAN: On page 18.
[00:33:54.19] LINH SONG: Yep, on page 18. Victoria, Dharma, could you read it?
[00:34:01.26] VICTORIA GREEN: Sure, I'm named first. I'll read it. The following resolution, the board resolves to accept the 2018-2019 financial audit prepared by Yeo & Yeo, CPAs. Two, that all resolutions and parts of resolutions that conflict with provisions of this resolution are rescinded.
[00:34:21.74] JAMIE VANDER BROEK: Seconded.
[00:34:23.85] LINH SONG: All those in favor-- or, is there discussion? Yes? No? All those in favor?
[00:34:30.38] ALL: Aye.
[00:34:32.32] LINH SONG: Opposed? Motion passes. Resolution passes. Thank you. Moving onto Bonner Advisory Group with Luke Bonner. Yes. So, a bit of background info. For the past several months, we've been in closed session on understanding what our real estate options are with the downtown branch. For many of us who were voted in 2016, it's been an ongoing question as to what the library can do with the space considering that we did not manage to pass our 2012 bond effort. And as the years have gone on, we've learned about what our capacity issues are, what our programming needs are, what the library's presence means to the downtown community.
[00:35:26.74] And thankfully, we've had information all along the way. I think we've been very good at doing our homework and asking good questions and getting the right people in the room to help guide us. And that included HBM Architects doing a program overview. We had our bond counsel come in and give us an update on how bonding would work should we choose that path. We've also done an epic MRA study or survey, and now we've come to Luke Bonner as our-- I think-- one of our final stops into understanding what our options are in coming to a better discussion. So Luke, it's all you.
[00:36:06.65] LUKE BONNER: Am I up?
[00:36:07.30] LINH SONG: Yes.
[00:36:07.83] LUKE BONNER: All right. Thank you. Thank you, Miss Parker, and members of the board. I'm very happy to be here tonight. I want to entrust my team very quickly. Luke Bonner with the Bonner Advisory Group, Travis Maezes-- our program director-- is also here. Scott Collins, with BBC Consulting, and John Myefski with my Myefski Architects. I'm very excited to work on this project with you guys. We appreciate the opportunity. This really builds on our experience of both economic development and real estate development in terms of how we looked at the library as a mixed use development opportunity in downtown Ann Arbor.
[00:36:48.27] Just a quick overview of what we'll be covering tonight. We will be looking at different aspects of the site itself and the massing sort of architectural layout of a redevelopment project, some finance options that the library could consider, economic development incentives that would be applicable to a project like this-- including an economic development incentive which would be a good alternative funding source for the project-- and then a benchmark study that we did just to confirm whether or not we were crazy with what we went through on this feasibility study.
[00:37:23.08] So in terms of what we were basing kind of the preliminary thought around this project were, number one, the fact that Ann Arbor needs a new downtown library, that it's a sustainable facility. We have major utilization for your use, high demand on your facilities. This downtown is growing more diverse every single day, and there is a true desire to have a library that must be very inspiring to visitors locally, and for folks coming in from outside of town.
[00:37:55.98] And based on that, we wanted to leverage the real estate, the location. The Ann Arbor market-- from a real estate development perspective-- is highly desirable both locally and nationally. The site itself is very well-positioned being very close to campus, but also a couple of blocks away from downtown. There's a significant demand for housing-- both affordable, market rate, and workforce housing in downtown Ann Arbor. There's a huge demand on office, so we wanted to make sure that we understood those markets as well when we were looking at the feasibility of this.
[00:38:28.36] But most importantly-- as you have all experienced-- going to the vote of the people for a new library failed a few years ago. So how do you go through this program leveraging a partnership-- a private partnership-- and even a public partnership with the city of Ann Arbor itself-- to get through building a very exciting library for the community and bring in uses in downtown that are of high demand as well?
[00:38:55.56] So just a quick snapshot of your property. It's a little over an acre in size-- just three parcels that comprise the library property. We're calling it public land zoned, even though two parcels are zoned something else, it's really kind of an obsolete zoning. So we consider this public land. The building itself is around 100,000 square feet. And this is the actual size of the parcel itself. Like I said, 52,000 square feet, or a little bit over an acre.
[00:39:23.89] When we looked at the massing of the site, we went to-- as far as this model goes-- we went to the maximum 900% percent floor-area ratio, which is allowable under D1 zoning. So that would have to be a re-zone of your property from public land to D1 zoning, but also, that 900% FAR includes the premiums-- which are now affordable housing premiums-- to build up to that size of FAR.
[00:39:50.53] For comparison's sake, we did pull the information that was publicly available about the Y lot, and what the city was seeking in terms of their RFP. And I believe they're concluding that study here very soon, if-- maybe if not even tonight, if I'm not mistaken. So we wanted to put the context of the library at a max FAR D1 zoning compared to the Y lot, which is what was put out in the public as far as that development process goes.
[00:40:17.70] Now here's a quick cross-section of the library itself. Four stories of library, two stories of underground parking. We put in one story of office-- which is around 25,000 square feet-- and then the rest of the project being mixed residential, meaning affordable and market rate housing.
[00:40:38.59] Here's an idea of size. So in our model, we have the library being 152,000 square feet. And that's based on the programming that we researched that you guys already had completed. We use 27,000 square feet as office, and then about 242,000 square feet of residential. In terms of the FAR itself, you can see-- based on the different areas-- the 400%, 700%, and 900%. Those are all based on affordable housing premiums. So on the 700%-- and this is new, by the way-- this is as of a couple of weeks ago, the city council voted for an affordable housing premium as far as the residential goes downtown.
[00:41:18.13] So if you see the 700%, floor area ratio requires 20% affordable housing using units. To get to that gross FAR, the 900% FAR requires 30% affordable units. Now in terms of timing, affordability was something that we were already looking at for this project. Our opinion was that the library-- being a highly-recognized and influential public institution-- that a redevelopment project of this size should consider affordable housing as part of the project.
[00:41:52.22] Now if we look at the finance options, or ways-- like, how do you do this deal? How do you put it together? We looked at a couple of these. First, we'll call a sale leaseback. Thank you. First we'll call a sale leaseback. And that is, essentially, selling the library property to the developer. Developer rebuilds the library, and then you lease the library back from him over a period of time. The revenue to the library is essentially the land sale-- the land sale itself could off set the cost of the bond required to build the new library.
[00:42:25.61] We have a sale buyback. You still bond to build the library, but then you have the land sale overall that would offset, again, the bond amount to actually-- which would reduce your debt service. We have the build and lease air rights. So you're building the library, you're doing a bond to build the library. You're leasing the air rights for probably 50 years, if not longer. So there is revenue coming in from the leasing of the air rights, which will offset your annual debt service. Building and selling the air rights. So you're still bonding to build the library. You're selling the air rights. You use that sale proceed to offset the cost to your bonds. And then the last was, you just build the library on your own, with no other partnership.
[00:43:11.02] So here's an example of what those different scenarios would look like. Drawing-- let me see, does this work? There we go. So we took a bond issue of around $62 million, which I think is pretty consistent with the construction estimates that we got based on your program. So we looked at that a couple of different ways. And if we took just your bonding ability and what would typically be sold out on the market, we looked at an annual bond payment of about $3.6 million to build a new $60 million library.
[00:43:44.94] Now if we were to lease the air rights, that would increase another million dollars, around a million a year in lease costs that would come back to the library, then essentially offsetting-- there we go-- offsetting the annual bond payment by a million dollars, or about $2.6 million. This would also, in this kind of scenario, after paying off your debt service-- which we assume is 30 years-- then leasing your air rights would continue on past that. So then eventually, at some point in the future, you would have an additional million dollars a year in revenue based on that that lease.
[00:44:23.85] In this scenario here where you're building the library and then selling your air rights, again, the same assumption is here where it's about a $62 million project. The sale of the air rights-- we used $16.5 million, which takes your net bond issue to about $45 million. And again, it's around the same annual bond payment, about 2.6 million. So just a couple of things really quickly in those first two charts. We used an air rights lease of a million dollars, and we used the sale of air rights at 16.5 million dollars. Those two numbers we came up with are based on what's going on in the market right now. It isn't necessarily what has been finalized or deals have been completed, but based on our intel, this is kind of where projects are being negotiated at right now. So that was a good rule of thumb for us to use today.
[00:45:18.09] Then we have the sale leaseback. Again, selling the property-- $16.5 million-- and then leasing back at about $33 a square foot, which is always negotiable, but that was a number that we wanted to plug in, based on Class A space downtown. Then you would have an annual lease cost of about 5 point million dollars to lease that space over time. But again, a sale proceed of about $16 and a half million that would allow you to offset a lot of costs for the construction of the library.
[00:45:52.47] Then we have a sale buyback where you're selling the property. The developer is building it for you and you're buying it back, so still having to issue bonds to buy that property back. If we assume you're still selling it at $16.5 million-- the land-- still bonding for a $62 million library, that your bond amount is going to be around $45 million-- again, to buy that portion of the library back from the developer, which again brings your bond payment to about $2.6 million.
[00:46:21.70] And of course, the exercise of just building a library by itself would put you at a bond payment of about $3.6 million.
[00:46:30.02] So part of what we went through on this, there are so many variables tied to this. This all assumes, number one, a developer pro forma that works. So we took kind of the developer vantage point of doing a deal in downtown, knowing the affordable premiums that are in place, recognizing either what the property is being leased for or sold for, and does that on its own make sense?
[00:46:57.95] Then we took your portion of your project, binding for it, and how does it intersect into the property, and that's how we sort of made our best guess, truthfully. And that's a combination of what we know today and what is sort of happening in the market today. But the reality is, a project like this is going to take several years to actually get through. We believe that the right thing to do is to have a very significant community input period which sometimes could last 12 to 18 months, depending on how that's actually laid out and the kind of input and feedback you're getting from the community.
[00:47:33.17] Then you have to assume a fairly thorough entitlement process with the city of Ann Arbor that goes along with that before you actually get to construction. So this is about what we know today, but this can change considerably to five years from now. This has more to do if we were doing the project right now, how would it look? But the underwriting for something like this wouldn't take place until several years into the future.
[00:48:00.36] LINH SONG: Sorry, can we-- did the numbers that you were presenting, does that include the cost of us operating in the interim, while the library is being developed?
[00:48:09.48] LUKE BONNER: It does.
[00:48:10.05] LINH SONG: OK.
[00:48:10.53] LUKE BONNER: Yes. So we included relocation costs as part of this, and then operational expenses, that would have to be somewhere else, either leased or some other arrangement.
[00:48:19.91] LINH SONG: Did you find us a space?
[00:48:22.86] LUKE BONNER: Again, given that this may not happen for several years, that would be hard to do. But you got great financials to do it.
[00:48:30.56] LINH SONG: Yes, we did just pass our audit.
[00:48:32.43] LUKE BONNER: We just saw it.
[00:48:32.95] LINH SONG: We're good. Great. So I think we're able to ask questions along the way, yes, so no one-- we don't have to wait till the very end, yes? OK.
[00:48:48.38] LUKE BONNER: So when we start to look at this kind of project, right? There is a huge public component, being the library. And then there's also a subsidized component, being the affordable housing. To a certain degree, the library is kind of in that subsidized component too. Based on the benchmark studies that we reviewed-- and I'll get to one in a few slides-- a project like this does need economic development incentives. It has to be a financeable deal for the private sector. It has to make money. I mean, whether we want to believe that or not, somebody has to make money on this project for it to work. And so there are a handful of economic development incentives that we believe could make building the library more feasible, but also doing the affordable housing component more feasible as well.
[00:49:38.34] So the first one we have-- and we call it the potential alternative funding source-- and that's through the-- what's called the Transformational Brownfield Legislation that was enacted a couple of years ago by the state legislature. The program is managed by the Michigan Economic Development Corporation, and these projects are transformational in nature, right? They have a huge impact-- locally, on the landscape of real estate, on the community-- this project falls in that category-- the investment size threshold that the state requires for a community the size of Ann Arbor. This project also fits, because we're looking at about $150-$160 million project.
[00:50:15.61] And why this is important, this funding source allows for state income tax and sales tax on a project site to be captured while construction is going on, while commerce is being active, and while people are living on site. It's a special carve-out so that those tax dollars-- essentially-- can be used to invest back into the project, and therefore reducing the capital outlay, potentially, the developer may have to build the library or to build affordable housing, therefore making the project more financially viable longer-term.
[00:50:51.46] The second box are two different examples of tax abatements. There's a Commercial Rehabilitation Act and Commercial Facilities Exemption. They essentially work the same. The one on the left-- the Commercial Facilities Exemption-- is a-- that's the one from 1978. Can't see. I mean it's too small for you guys, and therefore, it's too small for me. But that's a 12-year tax abatement at 50% of the rate. So instead of paying full 100% percent tax rate, you're only paying 50% for 12 years. The one on the right-- the commercial rehab-- which is the 2005 legislation, that actually freezes the value of the property at pre-development level for up to 10 years. So there are no new property taxes that are paid on the project over 10 years.
[00:51:38.13] And both of those scenarios, that's a significant savings to the taxpayer-- or the developer of the private sector developer-- which has a significant impact on the pro forma.
[00:51:47.95] The last two-- there's the Obsolete Property Rehab Act that actually works very similarly to the Commercial Rehab Act, where there's a tax freeze in place for actually up to 12 years on that property. Again, massive tax savings, which has a big impact on the financial pro forma.
[00:52:05.95] And then the last one is the State Housing Development Act, which enables a local community like Ann Arbor to take a payment lieu of taxes on affordable housing projects, versus the typical ad valorem property tax.
[00:52:21.71] And then our case study in Little Italy, the Little Italy Branch Library in Chicago. This was a public-private partnership, very small though, in terms of comparison. The library itself-- in this case-- is only about 22,000 square feet. But the different layers of incentives that were required-- even in that case-- to get this project done, were pretty significant.
[00:52:46.37] There's a low income tax credit on the library, which is special to the city of Chicago. There's about 15 and a half million dollars from the Chicago Housing Authority in terms of capital that was provided to the deal itself. There is the 4% low income, housing tax credit, or LITAX. You've heard of that terminology before on the affordable housing side. The library's set in the tax increment financing district. So there is $17 million dollars that went into the project for infrastructure improvements. Then, the private developer had a $3.1 million note on that. And then the TIFF-- different in Chicago than it is in Michigan, but there is a lot of the tax increment financing funds-- which is an economic development tool-- that was leveraged to actually build the library itself.
[00:53:35.75] So in this case, the library was out zero dollars overall and then was able to lease their building back, essentially, for $1 a year for 99 years. There was a donation credit, also, within the city of Chicago, because there was land donated back as part of the project. And originally, it was on 120-acre site owned by the housing authority, which this piece was specifically split off and set aside for this property.
[00:54:00.61] The point on this, there was affordable housing. There was also market rate luxury housing on this, and something to note-- because I know affordable housing is a major discussion in Ann Arbor right now-- for the purposes of doing an affordable housing project in a downtown environment where you're building vertically, there are costs-- there aren't cost benefits for doing vertical construction. Where it may seem like from a density standpoint, you just go taller and taller, you can fit more affordable units in. But there are nuances within the tax credit that only allow a certain portion of the tax credit to apply to construction costs.
[00:54:35.76] So when your construction costs go up because you're building vertically, then all of a sudden it can't do as many units. And what helps offset that is bringing more market rate units into the process, or into the development itself. That's also something that HUD and MSHDA-- which is the Michigan State housing development authority-- want affordable housing units mixed in with other income type of units. So that is, essentially, what had happened on this project. There's a mix of market rate and affordable housing, which is also the mix that we looked at on the pro forma that we built in for you guys as well.
[00:55:09.04] LINH SONG: Can you-- do you know? Can you describe what kind of partners came in on that so when you're talking about partners, were they other nonprofits that moved--
[00:55:19.34] LUKE BONNER: So it's primarily the Chicago Housing Authority, the city of Chicago, a private developer, and the library, so there were four partners in that one.
[00:55:29.54] LINH SONG: OK. Thank you.
[00:55:33.43] LUKE BONNER: You're welcome. And then our closing thoughts overall, just to recap. Downtown Ann Arbor needs a vibrant library. I mean, it's very clear going through this process ourselves, but just knowing about the library-- the amount of programs that you guys are providing are incredible-- and you're almost over-leveraged with participants in usage of your facilities itself because you've done such a good job, quite frankly.
[00:56:00.01] So the need to have a new library is extremely high. The real estate is fantastic. It's a great thought on your end to look at how do we leverage this real estate to make our library happen, but let's make other community-based economic development programs happen within that.
[00:56:19.48] The development process-- if you choose to move forward-- the development process and the community partnership needs to be very thoughtful and very, very engaging. This is unique-- very unique-- for this community and I would say for the state of Michigan, this is probably very unique. It happens in other places, public-private partnerships happen regularly in other urban areas. It's not something that we see here all the time. So it can be done. Where there's a will, there's a way, but that has to be very transparent and open and engaging process.
[00:56:52.46] And then the private sector partner must be very sophisticated. It must be very well established. This isn't this isn't a project for a smaller developer. This is a project for a much larger developer that has both institutional and private equity backing and they're not going anywhere. And so, there are a number of those across the country that could engage in this kind of partnership. They need to weather the storm, weather an economic downturn. They need to be able to provide a lot of different resources to your team and to the community as part of this process.
[00:57:27.09] So with that, I'm finished with my presentation, and myself and the team are here to answer any questions you have.
[00:57:35.30] LINH SONG: All right, thank you. Thank you, Luke. Let's dive in. We are actually very excited about this. We really are. This is a lot of work on your part, and I know we've been through many discussions in closed session, so we can bring those to light.
[00:57:59.49] S. KERENE MOORE: So other than Chicago, can you give us examples of libraries and other communities that have made some sort of mixed use building work?
[00:58:13.90] LUKE BONNER: I have notes. There's one other that we put in the case study. It was another Chicago example. That one was a 44 one bedroom apartment project. Evergreen Real Estate was a partner with the Chicago Housing Authority. It happened very similarly to this one. There are several in New York. There is one-- I would say generally, I would say failed publicly-- where, at the onset, there was a promise of affordable housing-- an only-affordable housing project. And the timeline from conception to final construction was 20 years. And they ended up building only luxury residential units as part of the project. So that was like a bad example. But for a lot of reasons, that deal fell apart.
[00:59:10.74] But, yeah. In New York there's probably five or six that we looked at, and they're all generally the same. This is where your project is different, is that the library is so big. In those cases, the library was very small, usually 20,000 to 30,000 square feet.
[00:59:26.91] COLLEEN SHERMAN: Those are often branches, correct?
[00:59:28.80] LUKE BONNER: Branches, instead of a main District Library.
[00:59:31.83] COLLEEN SHERMAN: This is not something that has been seen in a main branch? Do I have that correct?
[00:59:37.79] LUKE BONNER: From what I could tell, no, but--
[00:59:39.01] JOSIE PARKER: From what we know-- not to this extent, no. It's been talked about, but it's not been done.
[00:59:46.14] COLLEEN SHERMAN: So, we would be pioneering.
[00:59:48.24] VICTORIA GREEN: And there's another distinction, too, which is we're not a city library.
[00:59:51.27] JOSIE PARKER: We're not. And that is something to point out. In the New York library system and the Chicago library system, those are city-- the libraries are departments of the city, so they're already connected to the city financially and to governance. So it's different in that respect that we're totally our own taxing unit and our own governing authority. So we would be the partner.
[01:00:15.33] VICTORIA GREEN: Right.
[01:00:15.93] JOSIE PARKER: We would be the partner. And that's why getting that partner right is very, very important. There is no other agency with our-- who bears the same responsibility that we do or the same risks that we do as in some of the Chicago or New York Public or some of the Brooklyn-- I think there's one in Brooklyn. Brooklyn has its own library system, so I think--
[01:00:42.20] LINH SONG: Can you speak to public reaction to housing on top of a library? Was it something that seemed out of scope for our library's mission?
[01:00:54.76] LUKE BONNER: Are you talking about in the studies, the benchmark studies we did?
[01:00:58.02] LINH SONG: Yeah.
[01:00:58.71] LUKE BONNER: It didn't seem like it, actually. What it seemed like, there was a strong desire for affordable housing and new investment in those areas. So these projects were catalyst projects to take public land and turn it into an economic development project. That, essentially, is the way it looked for us. In terms of the public engagement side of it, it's really hard to tell if there is major points of consternation with the public and the library or the city. I would say the project that took 20 years and then ended up like the bait and switch, that probably had a lot of problems with it.
[01:01:36.51] VICTORIA GREEN: But Luke, I'm going to give one other thing that's different here, is the way you're describing the projects, it sounds like the public engagement might have been different because they were adding branches as it were, so adding a new service to a neighborhood that didn't have a branch as opposed to replacing an existing.
[01:01:54.75] LUKE BONNER: It was a little bit of both. It was replacing and rebuilding an existing, and then also adding new branches.
[01:02:00.62] COLLEEN SHERMAN: You said twice-- and I heard this loud and clear, and I think it's important. It's kind of an exciting part of looking at this option, is how the public needs to be the next phase of the work we do if we move forward in this direction. We have a public meeting phase, and we have lots of conversation about what our users want.
[01:02:26.76] LINH SONG: And we also have to think about where we are within the greater scope of institutions here, right? Also tackling issues around affordable housing, and what is actually doable within our lifetimes and while we're still on the board, and with the money that we have, and while we're looking at the money that we need to do this.
[01:02:57.30] Can you speak to that? Can you speak to-- are there-- in the case studies that you've looked at, were there are zoning challenges or-- what kind of-- well, we talk about public engagement. How was that a collaborative effort in the other cases that you looked at?
[01:03:18.13] LUKE BONNER: Every project is different. It's really hard to compare how one went through a process versus the other, because the communities are all different. And I'll give you a really good example of that. I know it's not a library project, but if you look at what the Amazon headquarters 2 went through by the time it got in front of residents and stakeholders in New York, I mean, that was-- they kicked them out of town, right? They go to Arlington, and it's like, come on in.
[01:03:47.53] LINH SONG: Yeah.
[01:03:47.74] LUKE BONNER: So it's going to be completely different. Just my experience here in doing projects, there is a benefit to significant community engagement and how these shape themselves. And the city's process kind of lends it to multiple reviews in the community. You're different because you're a public entity. And so I think there has to be a lot of transparency established upfront of why you're doing this and what the benefits are. And then, it's kind of like, what does it all look like? How does it all come together? And I think it's ideal to have the partner with you upfront in those conversations going along, because they're the ones that are going to be able to determine the financial-- how this is molded financially-- both for themselves, but also, what does that relationship look like with you guys?
[01:04:45.11] So this is a very different community when it comes to public engagement. So I hate to compare it somewhere else. We just know that we have to do it here, and you have to be very patient with it. And then ultimately, you'll get a good outcome.
[01:04:58.34] JAMIE VANDER BROEK: So benefit-wise, when we look at the charts, it's really interesting similar at least three of them are. And then the only one that really stands out is if we just try to stay by ourselves and don't partner with anyone. Like, the number at the end is, like, almost twice as much capital outlay. So I think that's definitely worth considering. And it just logically makes sense, that like, if you try to do something by yourself, it's going to be harder.
[01:05:25.75] COLLEEN SHERMAN: And the risk is high.
[01:05:26.96] JAMIE VANDER BROEK: Right. So, like, I mean, I think you're right that we need a solid partner. But I can see advantages.
[01:05:33.34] COLLEEN SHERMAN: The affordable housing piece is really interesting, because my reaction is, yes. We want to do that, and we're not interested in using our land to make money. We're interested in using it to serve the public. I like the idea of people being able to live in the building who work here. So that's-- but having that conversation with the public, it'll be interesting to see what the thoughts are and how much sense that makes to people who have been, I think, grappling with this issue in terms of what's happening around Ann Arbor. It's a place people want to live, so how do we make sure that it doesn't become too homogeneous?
[01:06:16.70] LINH SONG: And who already work here.
[01:06:18.15] COLLEEN SHERMAN: Right.
[01:06:20.90] LINH SONG: Who work here and can't afford to live here.
[01:06:24.26] COLLEEN SHERMAN: Right.
[01:06:27.58] LINH SONG: All right.
[01:06:29.15] VICTORIA GREEN: So I just want to say, one other piece about it, which is that it's easy when we look at the numbers and start thinking about is it feasible to do? 'Cause this is a feasibility study, not a sort of a vision study about why we would want to move forward with the work and the effort and the risk. And things that enables us to provide for all of Ann Arbor, for our patrons, and our customers, and our city itself. And that's not in here, because we didn't ask you to do that as a part of your work, but that would be why we would do it is what we could get out of it.
[01:07:05.82] I have a really boring question after that.
[01:07:08.99] LUKE BONNER: I have a really boring answer, so--
[01:07:11.21] VICTORIA GREEN: The economic development incentives that you listed, those are all-- those don't affect our dollar numbers. Those are things that make it profitable for the partner, right? Those incentives don't change our bottom line in terms of the project. They just make it workable for the developer.
[01:07:27.30] LUKE BONNER: So it could. It definitely could. I think the one that would have the most impact is the Transformational Brownfield.
[01:07:34.02] VICTORIA GREEN: We could be the direct beneficiary of those?
[01:07:35.54] LUKE BONNER: You could be the beneficiary of that, because there's a 20% of the total eligible cost on the project could be counted as the incentive that the developer receives. It doesn't matter what cost of the project that essentially goes to. So if he took 20% of that incentive and applied it just to the library itself and you're selling the land to the developer or you're leasing the air rights or however it works out, that has a significant impact on what you end up paying you either for a bond or, you know, to lease it back to the library.
[01:08:08.68] VICTORIA GREEN: So it could change our math.
[01:08:09.39] LUKE BONNER: Absolutely.
[01:08:14.64] LINH SONG: So the massing that you had presented, I think it's worthwhile to just reiterate that this is not a design.
[01:08:25.31] LUKE BONNER: Correct.
[01:08:26.15] LINH SONG: This is a reflection of the data that we had given to you that other consultants had given to us. So when O'Neill did the evaluation and HBM did the program evaluation, this is what we need to continue to operate with additional things that the community needs. But this is not a final design.
[01:08:47.77] LUKE BONNER: No. You know, we took your program studies that you guys did and we based that into the stories of the library. This open space atrium area was certainly highly desirable as part of that process. And then what goes up above, what we did was standard in the market today. If somebody were doing this today, what components of the project would they do? It was high level, let's use this as our main assumption. But if you end up going through the process-- I mean, there's a lot of stuff we talked about in terms of having retail on the Williams side, potentially. Does that make any sense for you or the developer? Does more office makes sense for you for you or the developer?
[01:09:33.13] The other thing that you have to recognize, too, is you have total control of what goes on in here. You're not going to partner with somebody who's going to do something that you don't want. Right? You want uses that are going to work very well with the library. And so maybe a hotel doesn't work well with the library, right? So we were just plain Jane office residential. That's how we kept it. And then the two stories of underground parking-- which again, could be another layer of partnership, you know, with the DVM, considering that the library lane parking deck is right next door. Is there an expansion opportunity or not?
[01:10:11.79] LINH SONG: Good. There's so much potential with our building in our community.
[01:10:18.03] TRUSTEE: With our site.
[01:10:18.81] LINH SONG: Yeah, right, exactly. With our site, yeah.
[01:10:21.57] LUKE BONNER: Yeah, there's no potential with your building. That's what we're trying to say here.
[01:10:26.40] LINH SONG: Yes, yes, there is a difference. Thank you. Thank you. Gosh. Do we have any other questions for Luke and the team?
[01:10:34.29] COLLEEN SHERMAN: I really enjoyed working with the team. I learned a lot through this process. John, all the things that you-- all the considerations you made as we discussed the project and the process, you were really helpful, in particular. Thank you.
[01:10:49.08] LINH SONG: I think when-- I don't-- I never anticipated having this language of FAR and being able to speak to it and then understanding the complex thing around financing besides bonding, and then also thinking to-- how we can finance this without having this. How would we know when we surveyed the folks through the epic MRA study that the odds of a bond passing were not as great as we had wanted or hoped. But that survey-- that's two years ago now, right? So a lot has changed in two years. So this is a discussion that we'll continue to see if we need to take another pulse of the community, and, I think, have further discussions with the board, too before we go back out.
[01:11:44.23] COLLEEN SHERMAN: Great.
[01:11:45.59] LINH SONG: You're not going anywhere, Luke. The team is here.
[01:11:49.63] LUKE BONNER: I'm not going anywhere.
[01:11:50.53] LINH SONG: Yes.
[01:11:51.09] LUKE BONNER: For how long?
[01:11:55.27] LINH SONG: We'll see. We'll have to figure out how long this would take.
[01:12:00.89] VICTORIA GREEN: But this is a feasibility study.
[01:12:03.54] LINH SONG: Yes.
[01:12:03.66] VICTORIA GREEN: Not a plan, not an architecture design, not any of that kind of stuff, just in case folks are like, oh, you know.
[01:12:09.58] LINH SONG: No, it's just reference material, additional reference material-- for the library board who loves reference materials.
[01:12:16.20] VICTORIA GREEN: But we also like to move sometimes.
[01:12:17.88] JAMIE VANDER BROEK AND LINH SONG: Yes.
[01:12:18.70] LUKE BONNER: Yeah, I want to make sure I preface. This is not a document that can be taken to the public markets for bonding purposes or for financing purposes at all. It's very high level.
[01:12:29.52] LINH SONG: And also, you are not the actual developer so that's also--
[01:12:32.95] LUKE BONNER: We are not a development team here. Yeah. Just a bunch of guys willing to help out.
[01:12:42.46] LINH SONG: Thank you.
[01:12:43.87] JAMIE VANDER BROEK: I think one thing to note is that even if the appetite has changed in the community, like as we saw the schools were, you know, successful, that's great. But that doesn't mean that if we can avoid asking the public for more money, if there are other ways to finance this, I think that would be very responsible as a board, so yeah, that's what I'm saying.
[01:13:05.71] LINH SONG: And this is a promise that we made--
[01:13:07.15] JAMIE VANDER BROEK: Right.
[01:13:07.51] LINH SONG: --I think when a lot of us came on board, was to really understand what our options are and this is it. This is one of many options available to us.
[01:13:17.00] COLLEEN SHERMAN: It's been a journey since we started in 2017, and push towards this. Can we come up with a feasible way to do this without asking the public for more money? And that we actually have ideas are fantastic. I have a question for you that I might have asked before. Of those four options-- between air rights, selling, and air rights, leasing, look the most promising? Between those two, there seems to be a subtle difference in terms of what our costs are. Do you have a recommendation one over the other?
[01:13:59.59] LUKE BONNER: I don't. These are options that could be considered. And again, this really depends on once you get into a relationship with a private sector developer and the community, what does the reality look like moving down the road? And then at that point, what's more realistic financially, and then, you know, politically with your stakeholders. What's going to be the most beneficial? And in both cases, they essentially affect the bond the same. It's either you have revenue-- lease revenue that's paying the bond debt service, so you're saving $1 million a year, or using that number that we used-- $16 and 1/2 million to essentially buy down the amount of bond that you issue and then your debt service is still around $2.6 million a year. So they're-- they both have the same effect.
[01:14:50.62] COLLEEN SHERMAN: Right. But that seems leaps and bounds ahead of selling our property.
[01:14:58.55] JAMIE VANDER BROEK: No, let's not do that one. That one doesn't look good.
[01:15:00.73] COLLEEN SHERMAN: I think-- you know, my feeling about that is in general based on what I know right now, is that keeping the land that the library owns is something that we want to do because it's the public's land.
[01:15:15.25] JAMIE VANDER BROEK: Yes. I think that's the one thing, probably, that we all feel the same about. I think there's so much nuance on the board, but I think everyone feels-- I mean, maybe I don't know this, but I think that's one thing that you'd advise everyone that we will not give away the library's property. Like, that's very important.
[01:15:32.42] LUKE BONNER: But I do want to point out that in the leasing of the air rights scenario, that lease continues on over time.
[01:15:39.17] JAMIE VANDER BROEK: Right.
[01:15:39.61] LUKE BONNER: So long-term, there is a net benefit from that revenue stream versus just selling and have that one time income.
[01:15:47.48] COLLEEN SHERMAN: OK.
[01:15:48.80] VICTORIA GREEN: And Jamie, to add just a little nuance to what you said, I think-- I would say that I am absolutely committed to-- I mean, 30 years sounds like a long time, but 30 years is nothing for the library.
[01:15:56.98] JAMIE VANDER BROEK: Right.
[01:15:57.37] VICTORIA GREEN: So, like, we can't just think about what's going to work for 30 years. We have to think about-- we don't want to hamstring two generations down the road.
[01:16:06.19] JAMIE VANDER BROEK: Exactly. So we don't want to-- we don't want to, in 30 years, end up with no property in downtown Ann Arbor. I think that's what I'm trying to say.
[01:16:15.29] LINH SONG: I appreciate the long view of this. I mean, we are accepting a gift from the Ladies' Library Association. And this is-- how old is this institution-- the Ladies?
[01:16:26.20] JOSIE PARKER: On the Ladies? 18--
[01:16:28.21] JAMIE VANDER BROEK: They just had their birthday, right?
[01:16:30.17] COLLEEN SHERMAN: They had their sesquicentennial three years ago? Yeah, three years ago, something like that. It was three years ago.
[01:16:38.50] LINH SONG: Right. I think it's worth noting that we have fans and we have support. We also think along the same lines of understanding what our current needs are and then preparing for the future needs.
[01:16:50.90] JOSIE PARKER: And we're one of the last public library systems in Michigan who were founded by a Ladies' Library Association group with an active Ladies' Library Association group that has been uninterrupted all those years. There were a number of public libraries begun that way, but very few still have one.
[01:17:14.01] LINH SONG: Right. Well, thank you, Luke. Thank you--
[01:17:17.82] LUKE BONNER: Thank you.
[01:17:18.30] LINH SONG: --for that presentation. I think if we have additional questions, staff, Josie will follow up with you.
[01:17:24.69] LUKE BONNER: Please.
[01:17:25.42] LINH SONG: And I hope there are questions cooking in the audience for comments, too. So please.
[01:17:32.43] JOSIE PARKER: Thank you.
[01:17:33.11] LUKE BONNER: Thank you.
[01:17:33.61] S. KERENE MOORE: Thank you.
[01:17:34.07] JAMIE VANDER BROEK: Thank you so much.
[01:17:35.16] LINH SONG: All right, moving on to our agenda. We have a resolution to approve the project budget for the fourth floor renovation contract. So that's Len again.
[01:17:51.68] LEN LEMORIE: Yes, hello again.
[01:17:54.05] LINH SONG: And this is the fourth floor here--
[01:17:56.79] LEN LEMORIE: Yes it is. Yes it is.
[01:17:57.75] LINH SONG: --which is-- when, I think, many of us came on board. I think we called it, was it like the UN-style seating--
[01:18:03.96] JOSIE PARKER: Right.
[01:18:04.14] LINH SONG: --area.
[01:18:04.77] JOSIE PARKER: Right, and we've done some work, and now we're going to do more.
[01:18:08.59] LEN LEMORIE: Yeah, the fixed furniture is gone. Other than that, the space is pretty much the same.
[01:18:11.92] JOSIE PARKER: Just re-carpeted and repainted.
[01:18:14.08] LINH SONG: OK.
[01:18:14.97] JOSIE PARKER: So now he'll tell you about the plan.
[01:18:17.38] LEN LEMORIE: Yes, so the proposal is to remove the curved wall, remove the concrete wall on the inside, move the control room and the podcast studio to the rear of the room. It would also give us a green room and a really nice gathering space and a check-in area for authors and different presenters coming into this space. So it basically reinvents the entire fourth floor public side.
[01:18:42.17] JOSIE PARKER: Can you orient them to where the atrium is and the entry, where things are now?
[01:18:48.72] LEN LEMORIE: Yeah, so, it says limits of construction. Right below that, that box is the atrium. And so the double doors you're seeing moving forward that says entry is-- that does not exist. That would be a new wall there that was the emergency exit hallway from the existing room now. And so currently, you can see, it's kind of shadowed-- just above limits of construction to the left. You can see that little room, that's our kitchenette to conference room where we have closed session.
[01:19:18.13] LINH SONG: OK.
[01:19:18.63] LEN LEMORIE: And so just on the outside of that would be the new check-in area, and then that large open space.
[01:19:27.24] VICTORIA GREEN: I'm sorry, like, where are the doors into the room today? Where on this map are the doors into the room or the atrium?
[01:19:33.77] LEN LEMORIE: Kind of--
[01:19:36.20] ELI NEIBURGER: Currently, there's a wall right here. Curved wall comes across like this.
[01:19:42.06] VICTORIA GREEN: Yes.
[01:19:42.39] ELI NEIBURGER: And you walk back here and the coat rack's over here. This is the entrance.
[01:19:47.38] VICTORIA GREEN: So when you said limits of construction, I was looking at the one at the top.
[01:19:49.90] LEN LEMORIE: Sorry, I apologize. No, that's the exterior wall. Outside of that is air. Yes.
[01:19:55.06] VICTORIA GREEN: Got it.
[01:20:00.76] LINH SONG: So would we have closed session in the green room, then, from here on?
[01:20:04.27] LEN LEMORIE: No, this doesn't Impact conference room.
[01:20:06.68] LINH SONG: Oh, it's still there.
[01:20:07.63] JOSIE PARKER: Are you in the kitchen room?
[01:20:08.80] LEN LEMORIE: Where the green room now is a storage closet.
[01:20:10.96] JOSIE PARKER: It's a storage closet.
[01:20:11.95] LINH SONG: OK, OK.
[01:20:13.14] JAMIE VANDER BROEK: It's nice to see you thinking big and beyond just like renovating inside that one room, you know? Because there's a lot of almost dead space up there on the fourth floor. That hallway-- I actually sat there today for a little bit and charged my phone. And, like, it's an OK spot to sit for a second, but it's pretty dark and I'm glad you're--
[01:20:33.09] LEN LEMORIE: Yeah, this is like a mini-project. We talked about the room, and then with everyone involved inside the library staff, you know, what could we deliver on that really meets the needs of everyone? And the room just kept getting a little bit bigger.
[01:20:45.42] JAMIE VANDER BROEK: That sounds typical, right?
[01:20:47.80] LINH SONG: Can you describe-- so who is everyone?
[01:20:50.44] LEN LEMORIE: Myself, Eli, Matt Dubay, Rich Reyti. I think Amanda Szot was involved. That'd be the short list. I'm sure there were others on their staff that have also had ideas.
[01:21:02.28] JOSIE PARKER: So what's the seating in this new space?
[01:21:05.44] LEN LEMORIE: We're currently at 180-ish. I think this takes us up to--
[01:21:08.44] ELI NEIBURGER: We're currently 120. This gets us to 180.
[01:21:10.46] LEN LEMORIE: This gets us to 180.
[01:21:11.83] LINH SONG: All right.
[01:21:13.45] VICTORIA GREEN: So I have a general perception since we moved our meetings down here that we're using this space for lots of programs--
[01:21:19.12] LEN LEMORIE: Yes.
[01:21:19.63] VICTORIA GREEN: --in a way that we could only do limited before. And this is not to remove that, it's to add the sort of reconfigure it with the idea, and expand the capacity for programming.
[01:21:30.12] LEN LEMORIE: Yeah, and I might be-- so this room, when we moved down here for the board meetings, this room had already had the AV package. So when we went to stream it, it only, it made sense for it to be in this room or we would've had to have done this already upstairs. The cameras upstairs, that's old CTN cameras. We don't-- that department would have to set the room up every time we have a board meeting. Here, it's a little bit less work. It's still work on their staff, but it's less. This would give us two options. So if there was a huge program here, we could do the board room on the fourth floor and still live stream.
[01:22:05.88] VICTORIA GREEN: That's kind of nice. Because sometimes, I mean, in the summer sometimes, we need the space, but we don't always have a large audience.
[01:22:12.52] LEN LEMORIE: And this space--
[01:22:13.21] LINH SONG: I know we have a lot of fans, though.
[01:22:14.54] LEN LEMORIE: Yes. The stage impacts this room too. So there's only so much we can do in here.
[01:22:22.16] LINH SONG: Great. Any other questions for Len, then, before we go ahead and read this resolution and vote on this? Any other thoughts?
[01:22:31.70] JAMIE VANDER BROEK: Is the podcast studio something you want to make available to the public to use, or is it mostly something where you're like vetting stuff and--
[01:22:39.90] ELI NEIBURGER: Yeah, part of the issue with the current podcast studio which is kind of in a former telephone room, is that it busies this whole room for us to use the podcast studio. And part of the design of this is, it will allow the podcast studio to be used even when a program is happening in the room. That's why you can see the double walls, the soundproofing in there. It's adjacent to the new control room, so it is possible.
[01:23:01.73] The other part of that is that the podcast studio is where a third camera or a fourth camera can go when there is a large fancy event happening in that room. So it's actually like a double sliding door. We can open and have a camera person inside the podcast studio that's not taking room away from the seated space. So it is-- and the other part of this is that this will allow easier access to the public to be able to allow booking of the podcast studio, especially for partnerships.
[01:23:31.11] LINH SONG: We don't have that now?
[01:23:32.82] ELI NEIBURGER: We're able to do it, but it requires-- as I said, the entire room to be busied. And it is very much a makeshift space, so we lose the boardroom as a bookable meeting room when a podcast is being recorded, whereas this, they make them separate spaces, and we'll be able to book them separately.
[01:23:51.17] LINH SONG: Great. So when Sarah Vowell came and did the podcast, she had the entire--
[01:23:56.14] JOSIE PARKER: The entire room.
[01:23:57.92] ELI NEIBURGER: Yeah, we can't do anything in that meeting room when we're recording a podcast, currently.
[01:24:03.61] VICTORIA GREEN: I don't think there's any real-- are there any accessibility concerns, compromises, or improvements that this design makes for us?
[01:24:11.36] ELI NEIBURGER: It does give us two exits, which is-- you know, currently we have two emergency exits. This actually gives us two real exits. So we would be able to be-- a lot easier to get out. It gives us a nice big double door, which currently there's a single door going in there. So accessibility is generally improved by this. Especially, we do have the option-- once we get to a point of stage design-- to make an accessible stage. It depends on the stage height and the ramps and all that kind of stuff, but it would be possible for us to do that in this space where we can't currently do that.
[01:24:42.89] LINH SONG: Are our bathrooms still-- I mean, can we still accommodate--
[01:24:45.90] ELI NEIBURGER: That's actually-- we're anticipating that once this project is completed, this will become our main program space for the downtown library, mostly because there's more toilets up there. And there are-- those toilets each have two stalls instead of one. So right now down here, there are just these two bathrooms on either side, so that's a much better sizing for that. Plus, there's just more room for people to be around the space. There's the green room, all that kind of stuff that we don't have right now.
[01:25:11.28] One of the major challenges with this space is when we have someone famous, there's no place to tuck them that they can be private before the event without having to come up from the back of the room.
[01:25:21.60] JOSIE PARKER: Or it's usually my office.
[01:25:22.88] ELI: Yeah, whereas this-- that's why the green room is right in there. So they'll be able to have a space that's appropriate for that.
[01:25:30.45] JAMIE VANDER BROEK: But we still have one elevator.
[01:25:32.63] JOSIE PARKER: That's right.
[01:25:33.23] ELI NEIBURGER: Still have one elevator. Yeah.
[01:25:35.39] JOSIE PARKER: That's right.
[01:25:35.78] S. KERENE MOORE: Estimates.
[01:25:38.22] JAMIE VANDER BROEK: Well that's why we're like, you know, living our lives now the best we can, but we're planning for the future, right?
[01:25:43.68] ELI NEIBURGER: I mean, you just as much need the elevator to use this room as you do for the fourth floor room, yeah.
[01:25:49.06] JAMIE VANDER BROEK: An accessible stage would be really great. We thought for a long time we couldn't do it at the library that I work at. And when we finally did, it's pretty huge to be able to allow anyone to present from the stage just like everyone else.
[01:26:04.69] LINH SONG: Are there-- anything else?
[01:26:06.65] JOSIE PARKER: Numbers.
[01:26:07.62] LINH SONG: Oh, yeah.
[01:26:08.92] JAMIE VANDER BROEK: Yeah, how much does it cost?
[01:26:10.51] VICTORIA GREEN: Right. It's Blank here.
[01:26:12.53] LEN LEMORIE: The good news is, from what we projected a few months ago, we're right in line with that. So the original construction estimate-- I think it was $390,000. We're actually under budget on the construction estimate, so we're adding that equipment in there. We're right on budget with what we talked about a few months ago.
[01:26:30.80] JOSIE PARKER: So are you asking for--
[01:26:32.51] LEN: $550,000. That includes all construction, all buildout costs, and all equipment costs.
[01:26:38.35] JAMIE VANDER BROEK: It's less than generators, I guess.
[01:26:43.63] LINH SONG: We do get pretty sizable crowds up there, though, right? Like for the cooking programs.
[01:26:49.15] LEN LEMORIE: Oh, absolutely. If it's not its own program space, it's overflow for other programs, so it's used as much as possible, and this would just increase that. And it's less than $62 million.
[01:27:07.25] VICTORIA GREEN: When could construction start, and when could it finish? Like, what's that--
[01:27:10.58] LEN LEMORIE: If the resolution passes, we would actually start awarding contracts and start construction in January. Or sorry, December and January.
[01:27:18.94] VICTORIA GREEN: And when would we expect to be complete? How long would the building-- the room be out?
[01:27:22.88] LEN LEMORIE: Probably 60 days, 90 days tops. So February we could probably start using the room.
[01:27:28.10] LINH SONG: So in time for festival season, then.
[01:27:30.14] LEN LEMORIE: Oh, yeah. By next summer for our big couple of, like, large programs? Absolutely.
[01:27:36.64] LINH SONG: Oh, it's like you thought of this. This is good.
[01:27:38.92] VICTORIA GREEN: Yeah.
[01:27:40.21] TRUSTEE: [INAUDIBLE].
[01:27:43.15] LEN LEMORIE: Yeah, we have the room booked out. If the resolution passes, we're ready to start construction. The room's actually booked out for two months.
[01:27:48.88] LINH SONG: OK, fantastic.
[01:27:50.26] JAMIE VANDER BROEK: I mean, I make a joke about the money, but honestly, like, to spend that much and get, like, a place where you could have all of your big programs that-- you've reached the limits with this room. Like, there's only so much you can do. But you get to kind of start from scratch in a way that you can't down here. I mean, it seems worth it to me.
[01:28:08.56] JOSIE PARKER: It's the combination of being able to have an event going on and something else too that makes this really-- 180 people. It's not as many people as we get in our lobby events--
[01:28:22.27] LINH SONG: Right.
[01:28:22.69] JOSIE PARKER: --but it's set up, that room. There's no changing it out the way we have to do the lobby constantly for that to happen.
[01:28:31.00] LEN LEMORIE: And Eli mentioned it. If we book the podcast room, it's a 10 by 10 room. We're giving up space for 120 people when we book that space out.
[01:28:38.40] JAMIE VANDER BROEK: I didn't realize you were doing that. That's pretty wild.
[01:28:40.64] LINH SONG: Yeah, that is pretty-- great.
[01:28:42.62] VICTORIA GREEN: I also think this is the first resolution that's come to me on the board for-- we've spent money downtown because we have to spend money on downtown on things like bathrooms, but this is the first investment in terms of recognize-- providing something that the community wants as opposed to they have to have, like a bathroom.
[01:29:00.40] LINH SONG: Or new carpet, orpainting.
[01:29:02.26] VICTORIA GREEN: Right. And we've been investing in the branches, not in downtown as much in that way. Do you guys agree or disagree with that assessment?
[01:29:08.66] JAMIE VANDER BROEK: No, I agree. And the Secret Lab kind of came just before we all came on the board. That's probably the last big one.
[01:29:14.08] LINH SONG: And then we had the new carpet and new paint. That was pretty amazing.
[01:29:18.08] VICTORIA GREEN: The lobby on the first--
[01:29:19.28] LINH SONG: Yeah, and I'm pretty sure we did some work in the bathrooms,
[01:29:23.80] LEN LEMORIE: First floor--
[01:29:24.55] [INTERPOSING VOICES]
[01:29:24.61] VICTORIA GREEN: There was a lot in the bathrooms.
[01:29:25.87] LINH SONG: Right, right.
[01:29:27.10] VICTORIA GREEN: But that's 'cause we always talk about sewage.
[01:29:30.03] LINH SONG: Yes. This is exciting. I mean, we still had to circle it back to something bathroom-related, but this is really exciting. It'll be really interesting to see the new events up there. All right, so I think we're-- thank you, Len. If there are no other questions--
[01:29:47.70] VICTORIA GREEN: Thank you.
[01:29:48.36] LEN LEMORIE: Thank you.
[01:29:48.58] LINH SONG: Yeah? Thank you. All right, so can I have someone read the resolution?
[01:29:54.71] DHARMA AKMON: I'll read.
[01:29:55.45] LINH SONG: Thank you.
[01:29:57.00] DHARMA AKMON: OK. The board resolves, one, to approve a project budget of $550,000 for the downtown library fourth floor renovation project to be paid out of the capital projects fund. Two, that all resolution and parts of resolutions that conflicts with the provisions of this resolution are rescinded.
[01:30:17.78] LINH SONG: All right, can I get a second?
[01:30:23.03] LINH SONG: You went right to the vote, yes.
[01:30:24.23] LINH SONG: A motion?
[01:30:25.32] COLLEEN SHERMAN: Motion first.
[01:30:25.85] JOSIE PARKER: No motion first, though.
[01:30:27.50] JAMIE VANDER BROEK: Wait, you read the motion.
[01:30:28.63] S. KERENE MOORE: She just read it. But she didn't motion.
[01:30:30.55] LINH SONG: We actually need a motion.
[01:30:33.05] DHARMA AKMON: Sorry.
[01:30:34.69] JAMIE VANDER BROEK: Oh, OK. I motion what she just said. Does that work?
[01:30:37.22] S. KERENE MOORE: Second.
[01:30:39.20] LINH SONG: I still need a second.
[01:30:40.77] JOSIE PARKER: You got it. Kerene?
[01:30:41.18] S. KERENE MOORE: Second, second, second.
[01:30:42.26] LINH SONG: Kerene?
[01:30:42.45] JAMIE VANDER BROEK: Pros over here.
[01:30:42.73] [INTERPOSING VOICES]
[01:30:46.83] COLLEEN SHERMAN: Wait, I have a point for discussion.
[01:30:48.00] LINH SONG: Yes, please, discuss.
[01:30:49.25] COLLEEN SHERMAN: I wanted to say something that I think will be obvious, and might be a question. So if someone was watching this, they might ask this question and wonder, hey, how come nobody answered this question. OK, so we spend over half a million dollars after we just talked about creating a new building in this space. I think we've addressed some of the reasons why there might be concerns about that, which is the value's terrific, it's needed, it's something that we have demand for. Are there any concerns? Or, does anyone see that downside as having outweighing the benefits?
[01:31:25.82] LINH SONG: I mean, don't we already spend half a million a year just to keep it as it is? Like, right?
[01:31:33.50] JOSIE PARKER: Well, I think the reserve study that you have indicated that you're going to spend $10 million or more if you keep it just functional as safe and open and working and you do nothing else do it. So I think, you know, the question's a real question. It's a fair question. But you heard how many years it will take in order to get a project like what was discussed off the ground even to a point of discussion.
[01:32:08.86] Years is a long time in service work, the type of work we do, and I think you have to think in terms of not only in dollars spent-- and I'm not I'm not minimizing that-- but what's the impact? How many people will be affected positively by a change in a renovation that's going to take us a couple of months to provide? And that, to me-- and that's in this year. That's in 2020. And what's the answer to that question? And so you are balancing the short-term and the long-term. You definitely are. I think it's a fair question, and will people say you shouldn't have done that if you thought that one day you might replace the building? Yeah, some people will say that.
[01:32:57.67] LINH SONG: Yeah, well, I mean, here we are approaching 2020, and it's been almost eight years since the bond failure.
[01:33:05.03] JOSIE PARKER: Right.
[01:33:06.59] LINH SONG: So we have to think in 10, 20 year increments. You know, the decision that we make tonight will be like a nice interim move, hopefully, to see in between figuring out what else we need to do--
[01:33:21.14] JAMIE VANDER BROEK: In the meantime.
[01:33:22.00] LINH SONG: --instead of waiting.
[01:33:23.14] DHARMA AKMON: Yeah, I think we have to make the best decision now given the current context. We can't stop adding value to the library.
[01:33:28.69] COLLEEN SHERMAN: The benefit of this investment is huge.
[01:33:31.30] JAMIE VANDER BROEK: And we have control. We have complete control over whether or not we're going to spend this $500,000, and we have like ultimately only so much control over the long-term. So why not do what we can now?
[01:33:47.77] LINH SONG: Great. Anything else? Thank you for the discussion. We always do need discussion. Good. All those in favor?
[01:33:56.50] ALL: Aye.
[01:33:57.90] LINH SONG: Opposed? Great. Resolution passes. Thank you, everyone. Moving on. We have another resolution to transfer from the fund balance to capital projects.
[01:34:14.85] JOSIE PARKER: This is what the auditor referenced, in that they recommend that we do this. And the audit and the documentation, when you read it, you'll see that we did this once a year ago. We did not do this in the past year, and they recommend that we move the money from the fund balance-- which is multiple millions-- to this capital project, which is where some of the money will come from for the work that we're talking about doing.
[01:34:43.86] LINH SONG: Great. Can I have someone read the resolution?
[01:34:47.70] JOSIE PARKER: You want somebody to make a motion.
[01:34:49.32] LINH SONG: Oh, yes, actually, not just read. I do need a motion please.
[01:34:55.87] COLLEEN SHERMAN: I'll do it.
[01:34:56.65] LINH SONG: Thank you.
[01:34:57.07] JOSIE PARKER: You'll need a second.
[01:34:57.91] COLLEEN SHERMAN: I move that the board resolve to transfer $1.5 million from the undesignated fund balance to the capital projects, that all resolutions and parts of resolutions that conflict with the provisions of this resolution are rescinded.
[01:35:14.50] LINH SONG: I need a second, though, too.
[01:35:16.21] VICTORIA GREEN: Second.
[01:35:17.33] LINH SONG: Thank you. Discussion? Any discussion? Great. I think we're just-- we're finally the auditor's recommendations.
[01:35:27.22] COLLEEN SHERMAN: We talked about this in depth in the finance committee meeting. This recommendation makes perfect sense, and did you have anything to add from that meeting? It's about accounting and how we keep track of things.
[01:35:43.33] LINH SONG: All those in favor?
[01:35:44.31] ALL: Aye.
[01:35:45.53] LINH SONG: Opposed? Great, resolution passes. We've got two more to go. Resolution of thanks to Laura Christian Raynor upon her retirement. I think something that Steve Vander Broek had wanted to present.
[01:35:59.24] JAMIE VANDER BROEK: Well, we'll tackle anyone else who tries to read this resolution.
[01:36:04.30] S. KERENE MOORE: I totally wanted to read it.
[01:36:06.57] JAMIE VANDER BROEK: I'm sure everyone wanted to read it. But I'm going to read it. So I move that the board resolve that it would like to officially thank Laura Pershing Raynor for her service as an employee from May 9, 1990 to November 15, 2019 of the Ann Arbor District Library, that all resolutions and parts of resolutions that conflict with the provisions of this resolution are rescinded.
[01:36:30.93] S. KERENE MOORE: Second.
[01:36:32.62] COLLEEN SHERMAN: I got chills.
[01:36:35.13] JAMIE VANDER BROEK: I have some discussion.
[01:36:37.08] LINH SONG: Let's have this. Let's have this discussion.
[01:36:39.52] JAMIE VANDER BROEK: So I think of Laura as, like, a through line from the past to the present of the library, and she is like a sunny soul of the library. Laura was my first boss at the library. I cold-called Josie while I was still in college and asked her if I could have a job at the library. Not for money, like, I wanted to be an intern. And she amazingly agreed to take me on and gave me to Laura. And Laura agreed to babysit this intern for the summer.
[01:37:12.58] On the day I arrived, her daughter was getting her wisdom teeth out, but Laura was just still busy, like, running story time, doing what she does. Like, that's the thing about Laura. She's just always so even and calm and sunny through no matter what. I'm sure you all have people that you look up to in your lives, and, like, probably for one thing that they do really amazingly or another. But how many people can you think of that you look up to in every single aspect of their life? Like, that is Laura.
[01:37:44.19] You know, she has this amazing family. She's raised two wonderful daughters. She was, like, she's my library idol, for sure. And I know there are other people who would say that. So I'm sure everyone has their, like, story to tell about Laura. And I think other people have memories from taking their kids to storytimes. Like, it would be great to hear others. But Laura, I mean, she will be really missed.
[01:38:14.04] LINH SONG: Well, I think that you. That was really lovely.
[01:38:17.10] JOSIE PARKER: I can add. I knew Laura before I came here as a youth manager, youth department manager, because we were both youth librarians. So I knew Laura from other places. And it was something when I became the manager of the youth department. Laura was the person who stepped up to help me understand this culture, this place, and helped me navigate through. And then every time I was-- when I was promoted from the youth department to administration, Laura talked through with me my reservations about leaving Youth Services. Because she understood what my reservations were. She understood.
[01:38:59.10] And while it wasn't a decision she would have made, she understood it was a decision I should make, and for all the right reasons. And every time that's happened, I've touched back with Laura about the options and all those things. And it's-- I mean, and Laura was somebody working here. And I could still do that. And there was still the confidentiality, and there was still the trust even though I was ultimately going to be the boss of everybody. And she could still talk to me that way.
[01:39:28.78] And I watched Laura over the last couple of months guide the people who were much younger than she is, who she's taught how to do what she does. I watched her help them see her retirement as a positive normal next step the way she helped me understand those things I was doing were my positive normal next steps.
[01:39:59.87] So while probably not everyone right now understands the gift she gave them over the last couple months and how she did that, one day-- one day, they'll be there, and they're going to go, damn. Laura Raynor showed me how to do this. And that is Laura's value and gift to all of us. And I'm with you. I'm trying-- I'm managing not to do that, but I'm with you.
[01:40:28.61] And when we saw all the little children sitting in front of the stage there for Laura, and they walked in the door Friday carrying bouquets to give it to Laura and cards to give to Laura. And I sat with her and she was sitting next to me, and while the staff she taught were doing so much of the storytelling and the performing, amazingly-- and the children were in it, totally in it. Laura had tears going down her cheeks. And I said, smile, Laura. The kids are looking at you, and they're still looking at you. They're frowning because they don't understand. Smile, Laura. You can keep crying, but smile, Laura. And she did. And she could.
[01:41:14.00] It was just an amazing evening. So Jamie, thank you for saying all of that. We do already, today, know Laura is not here. It's been a strange day. But thank you for saying that, and we thank Laura.
[01:41:28.05] LINH SONG: Yes.
[01:41:28.42] JOSIE PARKER: Who, I hope, is not sitting at home watching the library board meeting.
[01:41:34.22] JAMIE VANDER BROEK: Some nice person should make her, like just a clip of just this part.
[01:41:37.58] VICTORIA GREEN: I have just a really small story about Laura, who, I don't know personally as well as you all do, but for my kids from like toddler-hood up to secondary visits, she was the face of the library. She was the thing that they-- I mean, they didn't have a special relationship with her, except I think every kid did who came to them, to the story times in those years. And it was-- you know, I had a more complicated relationship with the library, but I think my kids just thought she was the library.
[01:42:05.65] And it's great to hear-- and I'm not at all surprised to hear that she managed things such that no kid is-- I mean, kids are going to miss her, but they're going to be able to have that connection in a different-- through a different body.
[01:42:17.62] JOSIE PARKER: Right.
[01:42:17.72] VICTORIA GREEN: So I just wanted to say thank you to her for that.
[01:42:19.81] LINH SONG: Yes, thank you. We-- are we voting-- I think we should just vote yes. All those in favor? yes.
[01:42:28.40] ALL: Aye.
[01:42:29.12] LINH SONG: Great. Perfect. So we have a vote for a closed session for next month to discuss real estate and also gather opinion of counsel. So that is a roll call vote.
[01:42:46.81] COLLEEN SHERMAN: You need a second?
[01:42:47.69] LINH SONG: Yeah.
[01:42:47.93] COLLEEN SHERMAN: You need a motion. I move that we have closed session on December 16th.
[01:42:53.91] S. KERENE MOORE: Second.
[01:42:54.79] LINH SONG: Thank you, Kerene.
[01:42:56.79] VICTORIA GREEN: Are we expected at 6 PM?
[01:43:00.30] LINH SONG: I think we're-- do we need to check with counsel, probably, for availability?
[01:43:04.23] JOSIE PARKER: He can attend. And what did we tell him?
[01:43:07.72] KAREN WILSON: I think 6:00.
[01:43:08.99] JOSIE PARKER: 6:00.
[01:43:09.67] LINH SONG: 6:00. OK. Great.
[01:43:11.27] KAREN WILSON: Dharma Akmon?
[01:43:13.62] DHARMA AKMON: Yes.
[01:43:14.43] KAREN WILSON: Victoria Green?
[01:43:15.55] VICTORIA GREEN: Yes.
[01:43:17.18] KAREN WILSON: Kerene Moore?
[01:43:18.44] S. KERENE MOORE: Yes.
[01:43:19.72] KAREN WILSON: Colleen Sherman?
[01:43:20.88] COLLEEN SHERMAN: Yes.
[01:43:21.39] KAREN WILSON: Linh Song?
[01:43:22.67] LINH SONG: Yes.
[01:43:22.93] KAREN WILSON: Jamie Vander Broeck?
[01:43:23.62] JAMIE VANDER BROEK: Yes.
[01:43:24.49] LINH SONG: Great, great. Thank you, everyone. And then, citizens' comments? So much for you to think about these past two hours.
[01:43:32.63] KAREN WILSON: I have two.
[01:43:35.35] LINH SONG: Welcome. Please come on up. Introduce yourself. You have three minutes.
[01:43:42.53] SCOTT TRUDEAU: Hello, I am Scott Trudeau. I don't have a ton to say. I was really excited to come and hear about the feasibility study for dealing with this piece of land. I wanted to thank you all for recognizing how much value is here and looking for a way to unlock that, not just to make the library's job easier to reinvent the space but to look to address other really critical needs, especially affordable housing, and I'm super-excited about the potential here.
[01:44:17.58] I think shooting for, you know, what the zoning would be if this were a private parcel and really going to that maximum scale makes no sense to really try to unlock all of that value and give it back to the community. There was a lot said about how unusual Ann Arbor is, and doing something like this is unusual. There isn't really a city that's done this before. There are other housing library branch things, but as discussed, like, nobody's done it. And I think in a lot of ways, Ann Arbor isn't as unique as it thinks it is, but I think in this case, we could really, you know, take a step forward and really lead the way.
[01:44:58.61] And that's-- I think the library, in particular, has done an excellent job at really being a leader, and so I'm looking forward to seeing you all take this on. I had one question which I think is answered just by implication.
[01:45:10.50] INTERCOM: Your attention, please. The library will close in 15 minutes. The internet stations will automatically shut off at 8:55 PM. Please make any final copies at this time, and take all materials to be checked out to a self check station, or to the circulation desk by 8:55 PM. Thank you.
[01:45:35.11] LINH SONG: That doesn't cut into your three minutes.
[01:45:37.58] SCOTT TRUDEAU: Let me start the clock. My last point on that was zoning, like, I'm-- I guess I'm assuming that the city zoning laws actually apply to the library, even though it's a separate entity from the city? Yeah, OK. Given that that came up in the discussion, because I know other public entities do not have to actually follow the city's zoning.
[01:46:00.96] JOSIE PARKER: We are currently public land, so if we chose to do something ourselves as a library only, we are not bound by some of the process that others are.
[01:46:15.71] SCOTT TRUDEAU: Gotcha
[01:46:16.08] JOSIE PARKER: If we were to do something like this, then we would be there.
[01:46:20.24] SCOTT TRUDEAU: Right, so any public-private kind of arrangement, and you're not going to build housing on your own without doing. So that makes-- that answers that question, so appreciate that. So, yeah. I'm excited to see how this goes forward, and kind of where it leads. Hopefully, the appetite here in the city is-- and the people here will join you all in kind of making this happen. I think it's really exciting.
[01:46:43.38] The one other thing I'll comment on is it makes me a little sad that we're potentially investing in a bunch of fossil fuel infrastructure for our branches. I'd like-- I can think of a lot of things if they were different, it would be easier to argue against buying generators and filling them with fossil fuels, but batteries are expensive, micro grids aren't really allowed, community solar isn't there yet. I'm hoping the schools with their new sustainability initiatives will kind of be creative in leading the way to help us figure out how these public institutions can be more sustainable with renewable energy and not with fossil fuel infrastructure. But I also understand the realities of where the library is now, but 20 years of more fossil fuels doesn't make me feel great, so thank you.
[01:47:32.69] LINH SONG: Thank you.
[01:47:32.93] S. KERENE MOORE: Thank you.
[01:47:33.20] KAREN WILSON: Dave.
[01:47:42.65] DAVE: OK, Hi. So just as an aside, Josie, I missed your Director's Report and that's normally one of my favorite parts of the meeting, so I'm sad for that. Normally it doesn't happen so early in the meeting. But aside from that, this meeting was like my reflection on it, it was a really good meeting. And I appreciate-- I forgot your name. no, Scott. I appreciate everything Scott said, and--
[01:48:11.86] LINH SONG: Len is also important.
[01:48:13.88] S. KERENE MOORE: We appreciate you, Len.
[01:48:16.23] DAVE: But now I'll just move to my comment, the original comment. So I noticed on the library programs that it says extended weekend hours at Westgate, but it's kind of an aside in italics. And I was talking with somebody, and they didn't even know that it was open longer. And on the program it doesn't say how long it's open. I don't know if that's intentional or not, but since the programs are coming out monthly now, it would probably make sense to say, hey, Westgate's open till 8:00 on weekends.
[01:48:53.63] Aside from that, I'm just going to plug the board meeting should also be in the printed program thing that I've plugged a bit, but, yeah.
[01:49:02.39] JOSIE PARKER: Just for you to know, the library's hours at Westgate match Sweetwater's if that helps you.
[01:49:12.72] LINH SONG: Thank you.
[01:49:13.98] S. KERENE MOORE: Thank you.
[01:49:19.87] KAREN WILSON: Jess Letaw.
[01:49:28.37] JESS LETAW: Thanks, Karen, for saying my name right. I appreciate it. I do put "Rhymes with seesaw" on the card. Hi. My name is Jess Letaw. I'm a renter on Ann Arbor's west side. I wear a lot of hats in the community, but I don't have any of them on tonight. I'm just here as a fan of buildings, the way they look, and how they act for us. I have all of the things I have to say are about the prospective new downtown branch.
[01:49:55.93] First of all, I had the opportunity to visit with the architectural team a couple of weeks ago who designed the library slash housing project that you guys reviewed tonight. It was really fun to talk to the team, but even more than that, they talked about where it's going. That was a prototype project. They really kind of designed it as an experiment and the city wanted to see how it went. The city was so happy with the results that there are six more in the pipeline either being designed or developed right now. So this may be new, but that doesn't mean that there's not a lot of energy behind it.
[01:50:31.24] I also wanted to say that I hope for an outreach process that is as thoughtful, as diverse, and as inclusive as the library itself. Community engagement is a really hard thing to do and there's no really right way to do it, but I'm just excited to see the library leading the way in community education and asking in a way that's challenging to do. So I'm excited for that.
[01:50:57.74] I also wanted to say when it comes to this being a unique project in Michigan and even nationally, Ann Arbor and Washtenaw County are already leaders. We're 80th out of 83 in terms of income and equality in Michigan. We're the eighth-most economically segregated community in the country, and we're the most expensive rental market in Michigan. We're already leaders. I'm delighted to see that the library is helping us be a leader out of these issues.
[01:51:33.07] Sorry. I just wanted to make sure I didn't forget anything important. And helping us address our community issues as well as our community opportunities through the library.
[01:51:43.43] And the last thing that I wanted to say is that I'm delighted to see that being inspirational is one of the new branch's goals, and that I hope that that applies to the eventual design as well as its function as well, to have an amazing building as well as a building that functions amazingly for the people who live here or the people who could. Thank you very much.
[01:52:04.36] S. KERENE MOORE AND DHARMA AKMON: Thank you.
[01:52:05.35] LINH SONG: Thank you.
[01:52:07.74] LINH SONG: Brilliant. Any last-minute folks who would like to sign up? Last words for the evening? All right, well thank you. We are adjourned. Thank you for joining us.
[01:52:21.16] SPEAKER 1: This program was recorded on November 18th, 2019, at the Ann Arbor District Library.