 Welcome back to Byline. This is a public affairs show here at Amherst Media and it's co-sponsored by the Amherst League of Women Voters and we hope that you've been getting some benefit out of this learning about our new town government and how things are unfolding as we stand up our town council and change a bunch of the procedures. We got so used to things the way they were with town meeting and a select board but it's a new day, a new town government and we hope that these shows are providing some insight into how things are evolving and how we're doing with our transition. And today our guest is Sharon Sherry, our director of the Jones Library and we want to welcome you and thank you for your service here in town. Thank you so much. You've been doing a great job and you're not only in charge of the Jones Library downtown but you have two other satellite libraries and they're busy as well. And today in order to help our viewers understand what's going on in the budget picture, we'd like to talk with you about, start out by talking about the budget and how your experience has been as we're transitioning from the previous system because you did five or six budgets under the old system and now you're doing a budget under our new system. So how's it been? So honestly I gave my FY20 budget request presentation to town council yesterday or the finance committee and they asked the same question. And from our viewers that may be a few weeks ago because the shows are not necessarily broadcast immediately but so you gave your presentation. Thank you very much. Yes. Thank you for that question. And for me, for the library, really the process hasn't been very different. I know other town departments have worked differently in the prior format but for us, I've always given my presentation to the budget coordinating group for example and then on to the finance And the budget coordinating group is? They are a group of folks basically everyone has a seat at the table and when I say everyone I mean finance committee, the school committee, the library trustees and well it was the select board and now it would be town council. And the beauty of BCG is it's short for the budget coordinating group. They begin meeting in October and so it's almost a year long, well an academic year long worth of conversations, you know what kind of issues, financial issues are the schools having, what kind of issues is the town having, what kind of issues is the library having. So it has always been this beautiful back and forth conversation. So when it finally comes full circle to it's time for, at that time it was town meeting and now it's town council, we are all on the same page about our needs, our challenges and what we're going to approve and it takes a lot of the guesswork animosity almost that I've seen in other municipalities that don't do this. So that process is the same under the town council form of government. And at that stage you're hearing the town's perspective on what they think is going to be coming up in terms of the amount of revenue available and the pressures on the town. You get to share your aspirations and in that process of going back and forth you get a sense of the parameters for budget making for the upcoming fiscal year and they get a sense of your hopes and aspirations and challenges for your department. And there are two sides to the budget, there's obviously revenue and then there's spending. Let's focus on the revenue for a minute because you get some state revenue. We do. How does that work? So we, let me go back just a little bit, a little bit beyond that and so I call them buckets. So the Jones library is one of the state's many hybrid libraries. We are a town department and we are our own 501C3 corporation and we have the best of all worlds actually. And so we have this town appropriation that comes and it funds 75% of our budget. But we also have state money coming in through state aid. We also have the endowment draw and then we have the fundraising piece. And so it's through all of these different buckets that we are able to fund our entire budget. So the endowment and your fundraising produces about 25% of your budget. Where does town appropriation come into that? So that's about 75% 75 and then the 25 is the endowment and the state aid and fundraising. So that's what I meant to ask. So where does the state aid fit in? What percentage of your budget is coming from state aid? It's about 6%. Just round numbers. It's about $100,000 every year that we get. And the state aid, the beauty of state aid is every public library in order to be certified and eligible to receive state aid, we have to play by some rules. So we have to spend a certain amount of money on books. We have to be open a certain number of hours per week. We have to have a certified library director based on population, that kind of a thing. And so what we get in return for being certified is not only the state aid award, but also we get to participate in statewide interlibrary loan delivery, the databases statewide, all sorts of things that we know one municipality could afford on its own. And the state aid award is based on three different things. Our circulation number, so the more we circulate the more money we get. The second piece of that puzzle is it's non-resident circulation in that. So if you're a certified library, you can use any other certified library in the state of Massachusetts with your library card, it's wonderful. If you're from a town that's not certified, each library that is certified gets to choose whether or not it will serve you for free. And so the thought there is if you in your town, if that municipality doesn't value library services enough to fund it properly, then why should that burden be put on the other municipalities that are funding it properly? So the higher the non-resident circulation, the more money we get through state aid because in theory, so it's a tax. So it's an effective regionalization approach and you're rewarded for making your collection available and for providing those services to other people. And so that's a very net positive because it also helps your budget. And so you basically have four revenue streams is one way to look at this. And the largest of course is coming from the town. And so the voters and taxpayers and residents of the community are actually by the amount of money that's allocated to the library making a statement about the importance of libraries as institutions. I love that. Yes, that is so true. It's the one town department in any municipality that really the voters are choosing to make a priority. And so the town of Amherst allocates a little over two million dollars to the Jones Library. And it's amazing. And by the way, we think about and support libraries in this community because we allow other people to come in and use our facility. It also says something about our values as a region and as being part of a broader community beyond our own borders. So that's really exciting public commitment and that's appropriate in a self-governing society. After all, if people don't have a place to learn and our schools do a big part of that job, but we need lifelong learning, we need to be able to find out information and get access to things through the library that we might otherwise not have. And it doesn't discriminate based on any capacity, economic, race, gender. You walk in that door, you, the whole world opens to you. It's so true. And that's so beautifully put. And I turn into such a geek when I start to talk about it. But how powerful is that that whether you have a really, really big home or no home at all, you can come to the library and we are going to treat you the exact same way that we treat everybody else. And a lot of people show up to use your computers while they're searching for a job. Students show up as part of doing their homework. People need to, you want to open up a business. You can come to the library and find out specifics about the kinds of things that you want to do in your business. But you can also get access to census data and all kinds of other things that you might need in order to help you think through your business plan, et cetera. So the library can provide a lot of different services. So we've talked about the revenue side. Now let's talk about the spending side. So we have three facilities in town and they're staffed and they have collections and books moved back and forth. Where does most of the money get spent in the library budget? So I think just as is the case for most municipal departments, you know, we're not building widgets. We are a service industry and so the majority of our budget goes to salaries. So the town appropriation, it's about 75% of our budget. Our salaries is actually about 78% of our expenses. So the town appropriation funds most of our salaries. There's still a small chunk of money that we use. We actually use state aid to pay for the remainder of our personnel costs. But everything else is paid for through state aid, through fundraising and the endowment. And that's why the endowment is so important and we can talk about the endowment and the draw rate and all of that. But the thing that it's important for people to understand is that the town appropriation only pays salaries. It's not paying for things like insurance and, you know, gas for the vehicles and supplies and staff training and stuff like that. How do you pay for the books and the periodicals and the subscriptions that you have available? And so that's all through. That's donations, the friends, yeah, and the endowment or other sources. Okay, very good. And you mentioned the endowment and you might be able to give us some more insight about how did that endowment come together. You told us a little bit about these other threads or streams of revenue. What percentage comes from the endowment? So the endowment is about, it covers about 12% of our operation operating costs. And so historically, the thing that's so amazing about the Jones Library is it began because of a bequest. Private philanthropy put us on the map and has been going strong for 100 years now, 100 years this year. And so when we talk about the need for fundraising, it's not a new idea. And where was I going with that thought? So we're talking about how the endowment got built and how it grows. And how it grows. And then how you spend it. Yes, so the philanthropy and that's where the endowment began. And right now it's at $8 million and it has had its ups and downs. Largely because of the market, because it's invested. Correct. And we've been through, historically it was passively managed and when the economic downturn happened in 08 and 09, the trustees switched to active management and there was a bit of a downturn there. But we have since switched back to passive management and it's doing beautifully. And over the years you've gotten bequests from individuals in town and sometimes it goes into the endowment or always it goes into the endowment. Which is it? The trustees pick and choose. They vote depending on the amount. Very often it depends on the needs of that day and what our revenue stream is looking like at that moment. So if we're in a recession and tax revenues are down and so your budget is under pressure from either state or local sources, you might end up using a bequest or gift for the operating or more of it for the operating and putting a little less in the endowment. It's that sort of give and take. Correct. They've tried, so over the past let's say four years, they've been able to bring the draw rate down to 4%. So that's our goal. And but in the past our draw rate has been in some years between 6% and 7%. So this set of trustees have really done an amazing job of keeping the eye on the prize. So we want our endowment draw rate low so that the endowment itself will continue to grow. Our goal is $10 million in the endowment so that a 4% draw rate will give us $400,000. That's really what we need to operate comfortably. And so while we went from 5.5% all the way down to 4%, those were some hard times. So we spent down a lot of our reserves and we've been ramping up our fundraising efforts and we're really headed on a great path right now. That's a very important set of goals because my understanding of how endowments work is that ideally you don't want to spend more than about 4% because then you start eating into the principal and what you want to be able to do is to build the endowment large enough over time that you can maintain 4% without eating into the principal. So that's the goal of the trustees at this point. That is a really tough job but it's also very, very prudent. And so that leads me to say so you're also now thinking and been working for a number of years on a capital project which is handled totally separately. So let's talk about how libraries get built in Massachusetts. We have an unusual situation because most states do not have a library construction program to subsidize the renovation and expansion or building new public libraries. So let's talk a little bit about that. The Jones Library was the beneficiary in the very first round of library construction grants back in the 1990s and it got a very healthy contribution to build that library. And here we are fast forward some 25 or so years later and we're engaged with the board of library commissioners again now in terms of a new project. So let's start with the mechanics. So how does the library construction grant program work? Oh my, oh my, okay. From the point of view of a community that's looking at improving a library. So once the library trustees and staff and friends group in any municipality start realizing, I mean it's a long process. They're starting to see deficiencies in the building and it's amazing. You would think what difference does the building make? You know, you have great staff, you have great trustees and a great municipality like we do in Amherst. All support library services, why do the four walls matter? Well, they really do, not only in the need for it being up to date, but the safety of it is very important. The technological aspect, you know, for a building to be wired properly for a building. And technology is huge for libraries now, correct? It is everything. And so you need that piece. And so the MBLC, I'd love to do a shout out to the MBLC and every legislature, legislator in the state of Massachusetts who has ever voted in favor of this funding program, probably such as yourself. I got to vote on the first bill and the renewal every 10 years or so. It's beautiful. As you said, most states don't have this. And it really speaks volumes about how much the state of Massachusetts values library services because this is money that, in theory, they don't have to be allocating. So you see the downside, the problem with the actual building. And so this group of trustees, they usually form a feasibility committee and they start detailing, documenting what the downfalls are, what all the problems are. And then you wait for a grant round to open up through the MBLC. And you work with them on planning and design. You hire an architect. You come up with a set of schematics. And then you end up with, here are a set of schematics. Here's a cost estimate. And then you take that to your town and you say, hey, we want to apply for the construction grant. And that'll be for the big multimillion dollar regardless of which municipality you're in. And you take it from there. And what percentage of the project is funded by the state if they approve your project? So in our case, the percentages I don't have off the top of my head, but it is a $35.7 million project. The grant is for a little over $14 million. So it's heading toward 50%. Yes. It's not actually 50%, but it's close. Yes, correct. We did a feasibility study, a financial feasibility study. We expect to raise through private donations and applying through historic tax credits. We're hoping to raise $6 million there, which would leave $15.9 million from the town. And at what point will the state release the money? That is the question. We have been told, we think we will rise to the top in FY21. So that's a year from now. And then I'm not sure when during FY21. It could be July. It might not be until January. So depending on when that happens. So you're on the waiting list. You have an approved project. They've approved your design and et cetera. And so what does the town and the community have to do in anticipation of your reaching the point where they have enough money to fund this project? So what we'll do before we're given the money from the MBLC is we'll start our capital campaign. We hope to do that this summer. And then we wait for the MBLC announcement. But when that happens, the town has between six and 12 months a year to vote in favor of the project. And what that means is they are voting for their share of the project cost. In this case, it will be the full $21.9 million because the state is signing a contract with the town. So they're taking responsibility for that in essence. But any amount of money that we fundraise or get through historic tax credits, that will offset what we actually take from it. So the town council has to vote for 15 million, 21.9 million, and how much do you hope to raise? Six. Six. And any other possibilities other than the fundraising and the town for that portion of the money? That's coming to my head right now. So it's a big job and the community's got a rally behind it. And the amount of money that has to be raised is not insignificant, but we've seen other campaigns in the community that have been successful in the range of what you hope to raise. Correct. And has the trustees set a number as your goal at this point? I think the split between the historic tax credits and the fundraising is about three million for each. So your goal would be to try to get three million in tax credits and three million raised from the people in the community. Correct. Very good. So let's talk about visions and aspiration. Any organization worth its salt, especially that operates in the public sphere, will have dreams and visions that exceed their current grasp, but toward which they're working. So let's start by saying in the upcoming fiscal year's budget, are there any new initiatives being funded if you are funded at the level that you've requested? There's one new database that we will be subscribing to. It's called Canopy. Canopy with a K. It is an incredible live streaming video service that there are a handful of neighboring town libraries that have subscriptions to this. But our trustees agreed to fund it. We get asked for it a lot. So it's their indie films and top documentaries. So we're not talking it's not Netflix kind of things. These are above and beyond perfect, a perfect fit for Amherst. So that's the one new initiative that we will be able to have. Everything else, it's really a level funded, a level service budget. We are focusing more efforts on fundraising and we're kind of not coasting. We're certainly we're working, but you've hit a plateau, but it's a comfortable plateau. This is where you want to be for now. And this one new service will enhance what you can provide to the community. So what's on the list that you would like to see happen someday? I'm not talking beyond beyond the building. What else would you like to see offered at the library? And you have two minutes to talk about it to dream. So if money were no object, I would love more staff specifically for programming. I have one of the things that I'm really proud of in my seven and a half years has been the, I call it a programming explosion. Our staff are so focused on providing programs and the community has responded beautifully. So right now we have on average about two programs per day for all sorts of agents. I think we could easily have four programs a day and they would be very well attended. So that's one piece of the puzzle. I would love ahead of technology, somebody who could really take us to the next next level, technologically speaking, because there are so many things that technology can do. And so I would love somebody who's actually in charge of the dreaming and the envisioning and then bringing it all on the tech side. So that's two really big ones. And do you think, well first, is the building being designed so that you could realize those more effectively once you're in a position to fund them? Yeah, so just talking about programming on its own. So right now we have three meeting room spaces that are used by the public as well as library staff for all of this programming. And so everybody's duking it out, battling for time. And in the new space once we have more meeting rooms, so children will have their own spaces to have their events, teens will have their own spaces, and it will leave enough space for the public to still have meeting rooms for birthday parties and company meetings and things like that. Terrific. Well, you heard it here. There's a lot of passion in what you've delivered for us today in this conversation. We want to thank you for joining us and thank you for watching and I get ready because they're coming at all of us here in town at some point to say thank you for supporting the libraries through your annual contribution through property taxes. But we're looking at a special initiative that is about to take form here in the community and they'll be tapping us all. So thank you for your passion and your good work and again, thank you for joining us.