Agenda Item: ______________


CITY OF SANTA CLARITA
AGENDA REPORT

PUBLIC HEARING

City Manager Approval:

__________________________

Item to be presented by:

Darren Hernández


DATE:


August 24, 2010

SUBJECT:

WITHDRAW FROM THE COUNTY OF LOS ANGELES PUBLIC LIBRARY SYSTEM AND ESTABLISHMENT OF AN INDEPENDENT MUNICIPAL LIBRARY

DEPARTMENT:

Administrative Services

_____________________________________________________________________________

RECOMMENDED ACTION

City Council:

1. Conduct a public hearing regarding withdrawal from the Los Angeles County Free Library system and establishment of an independent municipal public library system for the City of Santa Clarita.

2. Pass, approve, and adopt a resolution of the City Council of the City of Santa Clarita to withdraw the City of Santa Clarita from the Los Angeles County Free Library System and assume the responsibility for the provision of library services within the City of Santa Clarita, and taking other actions related thereto.

3. Award a contract to Library Systems & Services, LLC for public library management services through June 30, 2016, in the annual amounts not to exceed: $135,000 for Fiscal Year 2010-11; $3,117,633 for Fiscal Year 2011-12; $3,877,312 for Fiscal Year 2012-13; $3,935,472 for Fiscal Year 2013-14; $3,994,504 for Fiscal Year 2014-15; and $4,054,421 for Fiscal Year 2015-16. Authorize the City Manager to sign all contract documents related thereto, subject to the approval as to legal form by the City Attorney.

BACKGROUND

On July 13, 2010, City Council set a public hearing for August 24, 2010 to consider withdrawing from the Los Angeles County Free Library System and assuming the responsibility for the provision of public library services within the City of Santa Clarita.

The residents of the City of Santa Clarita are served by the County of Los Angeles Public Library (County Library) through libraries in Canyon Country, Newhall, and Valencia. The City of Santa Clarita is the largest city in Los Angeles County, and one of the largest in California, to not operate its own municipal public library. The primary sources of funding used to provide County Library services within Santa Clarita are the ad valorem property tax and the voter-approved special library parcel tax. Annually, the County Librarian provides the City of Santa Clarita with a statement detailing the cost of operating the three Santa Clarita library branches and the library tax revenue collected by the County Library within Santa Clarita.

The City of Santa Clarita – Net Contributor to the Los Angeles County Public Library

For Fiscal Year 2008-09, the total revenue collected within the City of Santa Clarita by the County Library was $6,486,502, and the cost for the County Library to operate the three library branches serving the Santa Clarita Valley was $6,069,834, resulting in a remaining surplus from within the City of Santa Clarita of $416,668. (Staff estimates that including the property tax and special library tax revenue from the unincorporated Santa Clarita Valley, the valleywide surplus is $2,619,833 for FY 2008-09. In addition, on this basis for Fiscal Years 2003-04 through 2008-09, staff estimates the cumulative surplus earned by the County Library from the Santa Clarita Valley to be $14,413,637.) In prior years, the City has requested the County Library use the surplus they earn from the Santa Clarita Valley to build new library facilities for the Santa Clarita Valley, in particular the construction of the new library in Old Town Newhall. We were informed that the County Library will not fund construction of our new facilities, because the funds are used to provide library services elsewhere within their service area. It should be noted the County Library financed the tenant improvements for the storefront library in Castaic, the recent refurbishment of the Valencia Library, the current build out of the City-built Canyon Country Library, and the construction of a brand new library in the relatively sparsely populated community of Acton.

Public Library Service Options

There are three options for providing library services within the City of Santa Clarita:

  • Remain with the County Library.

  • Withdraw from the County Library, and operate the libraries with City-hired employees.

  • Withdraw from the County Library, and operate the libraries through a contract with a professional, public library management services firm.

Proposed Public Library Service Enhancements

Under City operation, the City could significantly enhance public library services for the City of Santa Clarita. In particular, staff proposes to:

  • Increase the hours at Canyon Country and Newhall libraries by ten (10) hours each per week, or 19%, to keep both open later during weeknights and to open both on Sunday, thus matching the schedule of the Valencia library.

  • Increase the annual budget for book purchases by 22%, from $450,000 to $550,000.

The current and proposed operating schedules for the Canyon County and Newhall libraries are as follows:

CURRENT ENHANCED

SCHEDULE HOURS SCHEDULE HOURS

Sunday CLOSED 0 1 PM - 5 PM 4

Monday 10 AM - 8 PM 10 10 AM - 9 PM 11

Tuesday 10 AM - 8 PM 10 10 AM - 9 PM 11

Wednesday 10 AM - 8 PM 10 10 AM - 9 PM 11

Thursday 10 AM - 6 PM 8 10 AM - 9 PM 11

Friday 10 AM - 6 PM 8 10 AM - 6 PM 8

Saturday 10 AM - 5 PM 7 10 AM - 5 PM 7

Total Hours: 53 Total Hours: 63

The City of Santa Clarita owns the Canyon Country Library and will own the Old Town Newhall Library upon completion, which is anticipated in 2012. The County Library owns the Valencia Library and the existing Newhall Library. Should the City Council choose to operate Santa Clarita’s libraries, the City could purchase the Newhall Library and the Valencia Library from the County Library (or locate a replacement elsewhere), and would need to purchase the collections (books and materials) of all three libraries from the County Library.

Process for Assuming Operation of Santa Clarita’s Libraries

Withdrawal from the County Library is at the sole option and decision of the City Council, following a public hearing, as provided for in Section 19116 of the California Education Code. Upon withdrawal, the City is entitled to receive all property tax revenues allocated to the County Library from within the City of Santa Clarita, according to the City Attorney.

The significant steps in the withdrawal process are as follows:

  • The City Council, after a public hearing, notifies the County Board of Supervisors that the City wishes to withdraw from the County Library effective the following July 1.

  • The City Council has the right to acquire any or all County Library facilities located within the City and the personal property therein related, including books. Upon receiving notice that the City intends to acquire library facilities from the County, the County may donate the facilities or personal property to the City or sell the facilities or personal property to the City at no more than fair market value. A process is detailed in State law, including timelines, for determining fair market value. The County must transfer the library facilities and/or personal property to the City not later than the following July 1.

Fiscal Analysis Summary

Should the City Council choose to operate the City’s libraries, in the first year (FY 2011-12) it is estimated City Library revenue (property tax, special tax, and operating revenue) would total approximately $6.4 million. The cost of managing the three libraries depends on whether this is performed through City-hired employees or through a contract with a public library management services firm. Operating the libraries through City-hired employees would cost approximately $5.1 million, and operating through a public library management services firm would cost $3.9 million. In either model, the surplus between revenue and expenditures would finance (pay off over a period of time) start-up expenses and facility capital (construction and purchase) costs.

Fiscal Analysis and Projections

Below is a comparative financial analysis of the two library service options (staffing with City employees or contracting with a public library management services firm).

City-Hired Staff Operations Contract

Total Revenue: $6.4 million $6.4 million

Library Operations: $5.1 million $3.9 million

Start-Up/Facility Financing: $1.3 million $2.5 million

Total Expenditures: $6.4 million $6.4 million

Operating Santa Clarita’s libraries using City-hired employees would result in $1.3 million available to finance start-up and facility capital costs; this would support a financing in the amount of $16 million. After paying start-up costs estimated at $8 million for items such as the purchase of furniture, fixtures, collections, and library facilities, this would yield $8 million for facility capital costs.

Operating Santa Clarita’s libraries through a contract with a public library management services firm would result in $2.5 million being available to finance start-up costs and facility construction costs; this would support a financing in the amount of $33 million. After paying start-up costs estimated at $8 million, this would yield approximately $25 million for facility capital costs.

Facility capital costs could include paying for construction of the new library in Old Town Newhall (which would unencumber approximately $25 million budgeted by the Redevelopment Agency that could be used for $25 million for additional redevelopment activities in Old Town Newhall) or for the construction of a new library to replace the existing Valencia library.

Purchase of Library Facilities

California Law provides that, at the sole option of the City Council, any or all of the County Library facilities within the City may be acquired upon withdrawal at "fair market value." An appraisal report, dated July 3, 2009, determined the fair market value of the Valencia Library to be approximately $4.62 million. An appraisal has not been completed on the existing Newhall Library, which is considerably smaller and less valuable than the Valencia Library.

Other Startup Costs

Other costs would include purchasing at fair market value the existing collections of the Canyon Country, Newhall, and Valencia libraries, the purchase of additional books to augment an opening day collection for the Old Town Newhall Library, and various furniture, fixtures, and equipment for the Canyon Country, Newhall, and Valencia libraries. All of these costs would be financed using the library tax revenue allocated to the City should the City Council choose to operate Santa Clarita’s libraries. We estimate total start-up costs to be approximately $8 million.

Comparison of City Public Library Service Alternatives

Should the City Council decide to operate the City’s libraries, the two options for providing public library services are through City-hired employees or through a contract with a public library services management firm.

Quantity and Quality of Service : Both of these options would provide a similar level and quality of public library services for the community. In both scenarios, the City Council would set the overall policy parameters and service level expectations for public library services. In both scenarios, the City Manager, on behalf of the City Council, would be responsible for the overall management of excellent service delivery. In both scenarios, the employees providing public library services, whether employed by the City or a professional public library services firm, would be responsible and accountable for meeting performance measurement standards used to determine how well service level expectations are being met. In both scenarios there is full accountability to the City Council, on behalf of the public, for the management and operation of the City’s public libraries.

Cost Differences : As noted above, the cost of providing public library services through City employees would be approximately $5.1 million, and the cost of providing public library services through a contract with a public library management firm would be approximately $3.9 million. The difference in cost between these two options is due primarily to two factors: the lower cost of employee retirement in the private sector, and the extensive depth and range of experience within a large public library management services firm. The City would have to hire experienced senior public library administrative staff, while such expertise already exists within a large public library management services firm.

Transition and Assumption of Public Library Services : Coordinating the transition of the provision of library services from the County Library to the City of Santa Clarita would require immediate and vast public library management experience. The transition date of July 1, 2011, presents a tight timeline using City-hired employees, because we would have to recruit and hire a City Librarian and other top library employees, a process which could take several months. For a public library management services firm, nine months would be a sufficient amount of time to successfully complete such a transition. Such a firm could immediately commence transition activities. This would ensure we are prepared to commence public library services on July 1, 2011.

Other Considerations

Access to Collections

Access to collections is important, and under City operation, could be continued through participation in a cooperative such as the Southern California Library Cooperative (SCLC). As a member of SCLC, Santa Clarita’s public libraries would have direct access to items in the Los Angeles County Public Library collection, the City of Los Angeles Public Library collection, the Orange County Public Library collection, and the collections of the other library members of SCLC. Membership in SCLC provides public libraries with access to collections totaling over 29.6 million items. Santa Clarita’s public library staff could borrow a title from whichever public library can provide it the quickest, so patrons placing orders will get materials quickly. Most area public library systems charge patrons to borrow items from the collections of other public library systems (inter-library loans). The County Library, for example, charges patrons $3 per item for inter-library loans. Should Council decide to operate Santa Clarita’s public libraries, staff recommends the City charge no fee for patrons borrowing books through inter-library loan.

Professional Quality of Staff and Services of Contract Employees

The public library management services firm LSSI employs public library professionals to staff the libraries they operate for their client cities. For example, 31% of the staff of the Moorpark City Library (which is operated for Moorpark by LSSI) has a master’s degree in library science (MLS). Librarians who work for LSSI are paid competitive salaries and benefit packages, typically including a matching 401k retirement program. LSSI has a strong track record of successfully operating public libraries under contracts with cities and counties. Earlier this year, the retired Chief Deputy County Executive Officer of Riverside County published a white paper entitled “The Riverside County Library System: Thirteen Years of Innovation, Experimentation, and Progress.” This white paper, a copy of which is attached to this report, details the successful partnership that has been developed between Riverside County and LSSI.

LA County Library Budget Cuts

Los Angeles County recently cut the budget of the County Library by $8.8 million. As a result, the County Library has closed many branches a day or two each week or shortened hours. The County Library has also eliminated the Adult Literacy program. The Deputy County Librarian was quoted in a newspaper saying, “If some air conditioning unit dies that wasn’t supposed to die for another five years, we’re out of luck. If too many (computers) die at the same time, we may have to reduce the number of computers for the public.” While our three local libraries were not cut by the County this year, there is no guarantee they would not be cut in the future. In addition, during a meeting with the County Librarian on April 7, 2010, City staff was informed that with the opening of the new library in Old Town Newhall, the County Library would need to reallocate resources from the Canyon Country and Valencia branches to serve the new, larger Old Town Newhall library. Such a reallocation would result in service reductions at the Canyon Country and Valencia branches. Despite repeated requests for details of this anticipated resource reallocation, the County Library has not provided further information.

Protection of Library Tax Revenue

In a posting on SCVTalk.com , the County Librarian stated: “If you leave County service, the property tax coming to the City will be part of the City’s General Fund. That means that the City is not obligated to use it for library services. City libraries will have to compete for funding with other city service including police.”  In fact, State law (Section 19116(b) of the Education Code) provides that the library property tax revenue that would be received by the City of Santa Clarita is restricted and “shall be allocated to and used to maintain library services.” Therefore, these funds could not go into the General Fund, and a City public library would not compete for resources with other City services.

Special Library Tax

On June 3, 1997, the electorate in the “Enhanced Service Area” of the Los Angeles County Public Library, inclusive of the City of Santa Clarita, approved a special library tax by a vote of 70.00% in favor and 30.00% opposed. Within the City of Santa Clarita, the special library tax was approved by a vote of 71% in favor and 29% opposed. The County Librarian stated in The Signal that should the City withdraw from the County Library the City could not collect the special library tax. The City Attorney has researched this issue and determined that, contrary to the comments of the County Librarian, upon withdrawal from the County Library the City can levy and collect the special library tax approved by the voters of the City of Santa Clarita.

Enhanced Local Control of Public Library Services

As part of the County Library, many of the services, functions, and decisions related to local public library services are made by County employees at their Downey headquarters of the County Library. Should the City Council decide to operate the City’s libraries, decisions that would be made locally would include the books and materials to be purchased, the employees to be hired, the special programs to be hosted, the fees to be charged, and the policies to be administered. All decisions relative to public library services in Santa Clarita would be specific to and for Santa Clarita.

Stakeholder Outreach/Community Engagement

Over the past six weeks, the Council Library Ad Hoc Committee and City staff has conducted extensive outreach to key community stakeholders. The organizations and groups contacted include the following: Chamber of Commerce; Chamber of Commerce Government Committee; Canyon Country Advisory Committee; Canyon Theater Guild; Child and Family Center; Old Town Newhall Association; Newhall Redevelopment Committee; Saugus School District; Hart High School District; Sulphur Springs School District; Newhall School District; YMCA; Boys & Girls Club; Newhall Community Center stakeholders; College of the Canyons; Parent Teachers Associations; Zonta; and Friends of the Santa Clarita Libraries. To further disseminate information to the public at large and seek feedback, the City created the website SantaClaritaLibrary.com and published a column in The Signal .

Request for Proposals (RFP) for Public Library Services and Award of Operations Contract

The City of Santa Clarita issued a request for proposals (RFP) for the delivery of public library services within the City of Santa Clarita. One proposal was submitted by Library Services & Systems, LLC (LSSI). An evaluation panel composed of staff from the City Manager's Office, Administrative Services, Community Development, and Public Works reviewed the proposal. All members of the panel deemed the proposal to be comprehensive and responsive. Staff contacted client references, and the reviews were satisfactory. In addition, staff visited several public libraries in Riverside and Ventura counties operated under contract by LSSI and has interviewed LSSI personnel. Based on the review of the proposal submitted, site visits, interviews, and reference checks, staff recommends LSSI be awarded a contract to operate the public libraries of the City of Santa Clarita.

ALTERNATIVE ACTIONS

1. Remain with the County Library.

2. Withdraw from the County Library, and operate the libraries with City-hired employees.

3. Others action as directed by the City Council.

FISCAL IMPACT

There will be no impact to the General Fund. All costs and expenditures detailed herein would be fully funded through Public Library Fund revenue that is legally restricted and can only be used for providing public library services. A loan of $250,000 from the General Fund to a new Public Library Fund would be authorized as part of adoption of the resolution.


ATTACHMENTS

Resolution
Pros and Cons
L.A. County Cities
Riverside County Library White Paper
Cost Summary






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