Montclair to require library agreement or no additional funding without it
By JAIMIE JULIA WINTERS
The Montclair Township Council is expecting the library to enter into an agreement to get funding above the state statutory requirement and to create a more transparent budget process.
The agreement was discussed at the Nov. 1 council meeting and is expected to be presented and voted on at the Nov. 15 council meeting.
The agreement is a result of an audit of the Montclair Public Library’s budget that found problems, including more than half a million dollars in overstated expenses.
Consultants Bob Benecke of Benecke Economics and David Gannon of PKF O’Connor Davies, who reported on the $31,500 audit at the Oct. 19 council meeting, said the library should come up with a baseline budget only for the funding state law requires it to receive — even though Montclair has historically provided hundreds of thousands of dollars past that amount. Any spending above the statutory requirement should be presented separately, with a detailed analysis to aid in transparency, they said.
By state statute, municipalities are required to provide their libraries with a certain minimum level of support based on their property tax bases — known as the “third of a mil” formula, where a mil is 1/10th of a cent. In Montclair this year, that worked out to $2,680,152.
The agreement, which would be retroactive to last month and run through October 2027, states that no additional funds above the third of mil will be granted until the agreement is signed.
That has library Director Peter Coyl concerned.
For 2021, the council approved $419,848 above the statutory amount (of which $100,000 was not approved until June of this year), spread across four quarterly payments. This year, the library only received $174,209 in additional funding from the Township in Quarter 2. Coyl said the library has not received its payments for the third and fourth quarters, so it is currently missing $245,638 in funds.
Coyl, who compiles the budget, said library officials were unaware that the agreement would be on the agenda and that they expected to respond to the audit and the proposed agreement earlier this week.
He said he could not comment on the details of the report, but did say that the audit was based on a draft budget from July 2020 instead of the library’s audited financial statement from August 2020. Coyl said the library received the audit report and draft agreement on Friday, Oct. 15, which gave them little time to prepare for a meeting with the council’s Finance Committee set for Oct. 18. At that meeting, they were told that further conversations and negotiations would take place, he said.
According to a statement released from the library board of trustees after the council meeting on Nov. 2: “Statements made at last night’s council meeting give the impression of mutual communication and cooperation. However, we have not yet achieved a collective agreement. Until it was mentioned at last night’s meeting, the library was unaware an agreement would be on the agenda for the council meeting in two weeks.”
The audit also found the library consistently overbudgeted “other revenues.”
“In 2019, other revenues fell short by $160,000, and in 2020 fell short by $100,000,” Gannon said. “The 2020 budget also included a fund balance from the prior year of $300,000 as revenue.”
The 2021 budget included overstated expenses of $540,000 by improperly duplicating pension benefits by $280,000 and adding an expense labeled “Designated funds to transfers to 2022” of $260,000, the audit found. The 2021 budget also labeled $180,000 of transfers from 2020’s fund balance as revenues.
Coyl would not respond directly to the line item questioned by the audit, only to say that the township audited a draft budget and that some of the auditors’ notes were not factual.
He did say that the pension duplication was corrected in the financial statement the library provided to the township in August 2020.
Gannon also questioned why library officials were not able to provide an accounting of cost savings for the closure of the main branch from March 2020 to October 2020 and the Bellevue Avenue branch library from March 2020 to June 2021.
Although the library continued to offer pickups, deliveries and virtual programs during the closure, Gannon said it was not able to detail funds saved from the change in operations and programming. He noted the library continued to pay $4,923 annually to ACB Services for cleaning while the facilities were closed, which Coyl said the library retained due to staff still going into the building to set up pickup packages and with a concern about keeping the facility as clean as possible during the pandemic.
At the October council meeting, the consultants also recommended separate budgets for Montclair’s main branch and the Bellevue Avenue branch.
The agreement lists seven conditions to be met for the library to be considered for additional funding. Along with the library presenting separate budgets for the state-required funding and any extra funding asked of the township, the library will send the township a detailed draft budget by Oct. 31 each year. The library will provide the township’s chief financial officer with a budget versus actual report for revenues and disbursements and cash flow statement in a time and manner stipulated by the CFO. Anticipated revenues in a library budget should not exceed the amount received in the prior year.
The library will provide equal access to services and programs at each branch. Any changes to hours, programs or staffing must be presented to the township manager, and no significant changes in hours or closures can be made without prior township approval.
The library is to pursue all available grants before asking for additional funds.
The library will provide consistent plans, programs, policies and procedures in operation, maintenance and development throughout the township.
Coyl said the verbiage of the agreement pertaining to “equal access” and “consistency” between branches is very broad. He said that because the Bellevue branch is not ADA accessible, having the programs scheduled at the main branch means they are accessible to all. The library has asked in the past two years to apply for a grant through the New Jersey Bond Act to make the branch ADA accessible, but the town did not include the request for a match in their budgets, he said.
Both branches meet requirements by the state for funding and grants and by the Bergen County Cooperative Library System, a consortium of Bergen, Hudson, Passaic and Essex public libraries, from which items can be borrowed, Coyl said.
Libraries in New Jersey are semi-autonomous organizations, Coyl said. By state law, the board of trustees is the governing body of the library and decides how it will use the building and hours of operation, personnel policies, and prepares and controls its budget. Coyl said that due to the law the board can’t turn over its power to the township in reference to any changes in hours or closures requiring the township’s approval.
Within 24 hours of the Oct. 18 meeting, Coyl said the library provided the township with documentation necessary for the library to receive the additional funding through the current fiscal year that has already been approved by the township, but has yet to receive the funds.
In a letter to the editor, Mary Packer, executive director of the Montclair Public Library Foundation, questioned why the township had not yet released funds already promised to the library for 2021.
In 2022, the library’s required funding will jump to $2.8 million, and it plans to ask for a little less than what it received in 2021, Coyl said.
Councilman Peter Yacobellis said he doesn’t feel that the proposed agreement drafted specifically for the library is warranted if it isn’t consistently applied to other institutions that receive discretionary funding from the township.
“So while I of course respect the need for prudent financial management of all of our institutions, I’m far from convinced that this action is justified at this time,” he said.