City Council reviews new joint library agreement

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A proposed new operating agreement for the Hudson Area Joint Library — as well as a capital project agreement covering the possible purchase of the Nuclear Management Co. building as a home for the library — were reviewed by the Hudson City Council Monday night.

The biggest potential change in the operating agreement is that it would bind the four partner municipalities to a 25-year commitment should they decide to buy or build a new library.

The top elected officials in the four municipalities that are partners in the joint library — the city of Hudson, towns of Hudson and St. Joseph, and the village of North Hudson — have been meeting on Monday mornings since May to study the proposal to move the library to the NMC building.

The group — Mayor Dean Knudson, town chairs Jeff Johnson and Theresa Johnson, and village President Larry Larsen — quickly decided that a new joint library agreement would be needed if the municipalities were to buy the NMC building.

Attorney Jeff Redmond has been working with the group to draft the new operating agreement since early June.

Each of the partner municipalities would have to ratify the operating and capital agreements for them to take effect.

Knudson said the revised joint library agreement lays the groundwork for the acquisition or construction of a new facility. It’s an agreement that could stand, he said, even if purchase of the NMC building falls through.

Budget cap

Another significant change in the proposed operating agreement is that there would be a cap on the library’s operating budget that couldn’t be increased without the agreement of all of the partner municipalities.

Currently, each municipality levies a tax per $1,000 of property value that is used to run the library. Knudson said the problem with the current library levy (18.72 cents per $1,000 for 2008) is that the library budget automatically increases when property values rise.

He said the municipal leaders changed the funding mechanism because they are concerned about operational costs running higher than expected if the library moves to the NMC building.

“We don’t want to be low-balled on what it is going to cost to run the place, and then be surprised later and have no way to control it,” Knudson said in an interview last week. “So if it costs more to run the building, the trade-off for the library board will be that they are going to have less money to buy books and things.”

In another change from the existing agreement, each municipality’s share of the operating costs would be based on population. The existing agreement apportions the costs on the basis of property values.

Knudson said prior to Monday night’s meeting that the city has about 47 percent of the total equalized property value in the four municipalities that operate the Hudson Area Joint Library. The city’s share of the total population in the four municipalities is about 43 percent, he said.

The library’s 2008 budget is about $680,000, according to Library Board Chairman Jim O’Connor. The four partner municipalities will contribute roughly $610,000 of the funding, and the rest will come from St. Croix County, book fines and miscellaneous sources, O’Connor said.

Library board

The composition of the library board would remain the same under the new agreement, although the terms of members would end on May 31 rather than Dec. 31. The purpose of the change is to give municipal leaders elected in April the opportunity to appoint library board members shortly after the spring election.

The number of library board members from each municipality would be based on population and adjusted, if needed, following the federal census every 10 years.

Currently, the city of Hudson has three members on the library board, the town of Hudson had two members, and the village of North Hudson and town of St. Joseph each have one member. The Hudson School District also has one voting member on the board.

Capital project agreement

The draft capital project agreement requires that $2 million in funding from philanthropic sources be raised before the municipalities move forward with the purchase.

The Hudson Area Library Foundation has said it plans to raise half of the money it would take to purchase, renovate and equip the NMC building from private sources — including individuals, organizations, foundations and businesses.

The foundation’s latest estimate on the cost of acquiring NMC building and converting it into a library is $9.9 million.

It was the library foundation (a charitable nonprofit organization formed to raise money for expansion of the library) that in late 2007 learned that the NMC building was for sale and proposed acquiring it for a library.

NMC, which once operated number of Midwest nuclear power plants, has disbanded. Its employees, who continue to manage Xcel Energy’s nuclear reactors near the Minnesota cities of Red Wing and Monticello, have relocated to Xcel offices in St. Paul.

Knudson said Monday night that under the proposed capital agreement the $700,000 in library impact fees that the city has collected would go toward its share of the cost of acquiring and remodeling the NMC building.

He said the city has been asked to give up its rights to the book collection and equipment that it provided when the joint library was formed in 2003. If any municipality were to withdraw from the joint library after the NMC building is purchased, its share of the library assets would go to the remaining members.

Deadlines looming

Knudson said the deadline for the partner municipalities to decide whether they want to put the proposed purchase of the NMC building before the voters in a referendum is fast approaching.

The municipalities will have to draft their 2009 budget proposals two months earlier than normal in order to have the referendum question finalized the required 45 days ahead of the Nov. 4 general election, he said.

The deadline for certifying the exact language of a referendum question asking voters if they want to proceed with the NMC building purchase is Sept. 23, according to Knudson.

City Administrator Devin Willi said the question would have to specify what property owners’ tax bills would be without the purchase of the building and with the purchase of the building.

Before the advisory referendum on the NMC building purchase last April, the library foundation estimated that would cost taxpayers an addition 24 cents per $1,000 of assessed property value for the municipalities to buy and operate the building as a library. For city taxpayers, that amount would be on top of the 18.72 cents per $1,000 of property value they are already paying for library services.

At those rates, the total levy for library services on a house with an assessed value of $300,000 would be $128.16. The 2008 library tax on a $300,000 property was $56.16.

Knudson said elected officials of each municipality would need to vote on four items over the next two months if the project is to move forward:

1. An amended joint library operating agreement;

2. A capital project agreement for purchase of the NMC building;

3. A bond referendum question to be placed on the Nov. 4 ballot; and

4. A levy override referendum question for the Nov. 4 ballot.

Under state law, municipalities are prohibited from increasing their tax levy more than 2 percent, or the percentage of the increase in valuation due to new construction, in 2009. They can exceed the limit, however, if they receive the voters’ approval in a referendum.

Input

When Mayor Knudson asked for input on the library agreements Monday night, Alderperson Lori Bernard said that going ahead with a referendum after receiving just $2 million in cash or pledges for the library relocation was different from what was presented to voters in the April advisory referendum.

“It feels like a bait and switch,” Bernard said, noting that the estimated tax impact of the project was based on half of money coming from private donations.

Knudson said he had recommended that the partners set other fund-raising benchmarks that would have to be met before the municipalities bonded for the project, but there wasn’t much support from them for that idea.

Bye Barsness, vice president of the library foundation and the leading proponent of the proposed NMC building acquisition, said the foundation is confident that it can raise the promised private funding.

He said that a professional fund-raising consultant the foundation hired to assess the willingness of major donors to back the project came to the same conclusion.

However, raising $2 million by Sept. 23 would be a “tall order,” he said.

Barsness was accompanied by foundation members Ken Heiser and Susie Gilbert, and library board chair Jim O’Connor.

Heiser, the veteran of a number of community fund-raising projects, supported Barsness’ statements about the foundation’s ability to raise private funds.

O’Connor reminded council members that city residents supported purchase of the NMC building by more than a 3-to-1 margin in the April referendum.

He said the public would hold council members responsible if they don’t carry out its wishes.

O’Connor urged the council to, “Keep going on it and get there.”

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