Councilmember: Taxpayers subsidizing Sno-Isle Libraries

Distrrict collects $410K more than it spends
Apr 12, 2018
Courtesy of: Edmonds Libary

Edmonds City Councilmember Dave Teitzel wants to make sure he’s clear on one point.

“I am a strong supporter of the Sno-Isle Libraries,” he said. “They provide a very important service as part of a vibrant community and are delivering excellent library service to Edmonds citizens. And I understand the need for revenue to continue to provide top-notch service.”

But Teitzel has another issue, and this concerns the disproportionate amount of money Edmonds residents pay relative to other cities in the Sno-Isle system to maintain library services through property taxes. He says residents are paying too much.

“The issue is very narrow. As an elected official in Edmonds, I feel an obligation to look out for citizens’ best financial interests. And we are the only city in the Sno-Isle system contributing more tax revenue to the system than we are receiving in investments to our library.”

Teitzel’s concern is the existing funding model that causes Edmonds citizens to subsidize – his word – the system in other parts of Snohomish and Island counties, where the district has 23 libraries. Everett and Woodway are not part of the district.

In 2016, in numbers provided by Sno-Isle, Edmonds taxpayers paid $3.26 million in library tax assessments. Sno-Isle, in turn, recorded $2.85 million in expenditures to the Edmonds library.

“It’s an issue of equity for all Edmonds citizens,” Teitzel said. “Library users and non-library users alike. Contributions to Sno-Isle are based on a standard levy rate calculated against assessed property values, and since our assessed values are much higher than cities in other parts of the system, our citizens are contributing significantly more to the system than any of the other cities.”

As a comparison, in 2016, taxpayers in Marysville – which has about 26,000 more residents than Edmonds – paid $2.64 million in library tax assessments and received $4.15 million in expenditures from Sno-Isle. That’s a difference of $1.5 million to the good for Marysville citizens.

“In fact, Edmonds is the only city subsidizing the system,” Teitzel said. “The other cities served by Sno-Isle receive more library investment than they contribute in library levy revenue.”

Teitzel, who worked with Edmonds Finance Director Scott James in obtaining the figures, said his raising the issue of subsidizing the library is not related to Sno-Isle’s April 24 levy ballot (which he said he has already voted “yes” on), which seeks to raise the levy rate from its current 38 cents per $1,000 of assessed property tax value – which has held since 2009 – to 47 cents per $1,000 of assessed value.

(If it passes, Teitzel said the current subsidy Edmonds pays would increase significantly.)

In fact, Teitzel – the chair of the council’s finance committee – first raised the library issue in June 2017 when he spoke of a number of subjects, including the possibility of the library becoming less used over time – due in large part to changing technology such as the internet – whether it is the highest and best use of the building at 650 Main St., and whether it could potentially be moved to another location in the future as the distribution of Edmonds’ population shifts.

This week, Teitzel said these concepts are strictly ideas for discussion purposes as the committee looks at broader policy questions about the future of library services. He also had floated the idea of moving the library to Highway 99 or placing a satellite library there, relocating City Hall to where the library is now, and possibly putting another business at City Hall’s location, such as a hotel.

(The Beacon first posted Teitzel’s comments on Facebook last week, and received many comments from citizens against moving the library to a different location. A 2016 city survey confirmed that, with 97 percent of respondents agreeing that the city should maintain the current location.)

“I do not believe the library is obsolete, nor am I aware of any other councilmember who holds that belief,” Teitzel said.

“The discussion was merely an exploration of how library services may need to change to meet our evolving citizens' needs. This was nothing more than a blue-sky discussion about ensuring services our citizens receive best meet their needs, which may be changing over time.

“It’s the same thing with the issue about the library location. That was also a blue-sky discussion about whether the changing distribution of our population may call for library services closer to Highway 99 over time, as the city’s subarea plan creates opportunities for significantly more living spaces along the corridor.

“To emphasize, there are no plans to move the library, and we have every intention to ensure our citizens continue to receive great library service. And even in the hypothetical instance the library location becomes an actual issue in the future, nothing can or will happen without deep and direct involvement with our citizens and Sno-Isle.”

As Sno-Isle provided the figures Teitzel used when pointing out what he called the subsidy, Sno-Isle Libraries Executive Director Jonalyn Woolf-Ivory said the numbers did not come as a surprise to her.

“It has never been the intent to provide library service based on what is collected in any specific community,” she said. “That’s not how a library district operates.”

Sno-Isle spokesman Jim Hills said the $2.85 million is not an allocation of revenue that the Edmonds Library has access to, but rather an expense allocation that reflects the following categories:

  • Direct expenses, $1.49 million: These are expenses that can be attributed directly to salaries for staff assigned there, IT, maintenance, furniture and fixtures, equipment, supplies, utilities and other items.
  • Indirect expenses, $962,000: These include allocations of other expense items that can be attributed to the Edmonds Library. The expense categories are much the same as direct expenses; these indirect expenses are allocated using metrics that align with the expense itself.
  • Collection, $405,944: Sno-Isle Libraries has a "floating collection" available to all customers, regardless of location. For the purposes of expense allocation, annual statistics on item checkouts and renewals at the Edmonds Library are used.

Similar to school district

On Wednesday, April 4, Teitzel, James, Councilmember Diane Buckshnis and Mayor Dave Earling met with Woolf-Ivory and Sno-Isle Deputy Director Kendra Trachta to discuss Teitzel’s concerns regarding the library funding model.

In a later Beacon interview with Woolf-Ivory and Hills, the spokesman explained that state law requires the library operating levy to be evenly applied across the library district. Any differences between individual property-tax statements are due to property value, not the levy rate.

“All Sno-Isle Libraries customers, regardless of where they live in the library district, have access to all 23 libraries, plus the bookmobile,” Hills said.

“Library usage data show that many customers regularly use more than one community library. For Edmonds residents, that means they can pick up and return library materials in multiple locations as it fits their daily schedule and commute or travel plans. They can also attend classes and events at a number of locations relatively close to where they live.”

Adds Hills: “For Edmonds residents, that means Sno-Isle Libraries provides access to far more materials and resources than could be available at the Edmonds Library building, which is owned by the city.”

Woolf-Ivory compared the library district to the Edmonds School District, where the same levy rate is applied to all citizens, no matter where they live.

“Just like the school district, I’m sure there are areas in the district where taxpayers are maybe paying more money than a neighbor across the city,” she said. “But they’re paying at the same rate.”

Teitzel said he understands the comparison to a school district, but pointed out the library district’s service area is far larger than a school district and includes two counties.

That means Edmonds taxpayers are, in theory, subsidizing library services in cities geographically distant, where home values are much lower, such as in Darrington, Coupeville and Granite Falls.

“Subsidies are common in taxation models,” Teitzel said. “We are not seeking to eliminate the subsidy in this instance, and understand the benefit of helping residents of smaller cities. Rather, we are simply seeking ways to make the model more fair to Edmonds citizens.”

But Woolf-Ivory, during the interview, returned frequently to the argument that Sno-Isle users are free to use any library in the system.

“It’s especially apropos in south Snohomish County, with borders right up against each other. In Edmonds, the majority of folks who use the library there are city residents. At the same time, folks with Edmonds city addresses make considerable use of our other libraries.”

Annexation

In 2001, the city of Edmonds agreed to annex into the Sno-Isle Libraries system, “finding that the public interest will be served.” A majority of residents agreed to the annexation in a special election that summer. It became effective Jan. 1, 2002.

As part of the annexation agreement, the city of Edmonds is responsible for maintenance of the library’s exterior, while Sno-Isle is responsible for the interior, excluding common areas such as the lobby and restrooms.

For example, in June 2017, the Edmonds Library had its largest renovation and upgrade in more than 10 years. It received new computers and desks, additional self-check machines, a new holds area, fresh paint and an updated customer service area.

According to Hills, Sno-Isle paid $22,204 for the renovations and upgrades, while Friends of the Edmonds Library contributed $11,295. The total cost was $33,499.

Of issue today is the deteriorating condition of the library’s roof.

The annexation agreement stipulated that a Sno-Isle reserve fund, to total $1.1 million over the first three years, would pay up to half the cost for the roof’s replacement, up to $300,000. The fund, used for facility replacements, required the approval of City Council and the Sno-Isle Board of Trustees.

Teitzel said the roof was not replaced, but instead repaired, and that more work is needed.

“My feeling is that the city just wants more from Sno-Isle, and they're raising this big stink just to eek something small out of them,” said Luke Distelhorst, Edmonds resident and president of the volunteer, nonprofit Friends of the Edmonds Library. He has exchanged thoughts with Teitzel via email and in person.

“I believe that if the city is trying to potentially alter the service that its citizens pay for and receive through Sno-Isle, that it should be an issue made public and open for comment,” Distelhorst said. “My guess is they want Sno-Isle to pay for more than 50 percent of the roof, even though the contract says 50-50.

“To me, the issue I often see is since the city isn't using that building as a revenue generator (besides the Plaza Room), they are hesitant to put money into it. At the same time, Sno-Isle doesn't want to put money into improving the building since they don't own it. The city desperately needs to fix the leaking roof.”

Distelhorst, in an email to Mayor Earling and city councilmembers, said he is concerned that the public has not been kept in the loop on city and council comments on possible future arrangements with Sno-Isle. He has called for more transparency.

Teitzel reiterated that council and city discussions are just that: discussions. Any changes to the city’s annexation agreement with Sno-Isle would require public input and full council approval.

Possibilities

So what are the options for Edmonds taxpayers if a new agreement with Sno-Isle is pursued?

First, it should be noted that Dave Teitzel is just one of seven councilmembers. Any discussion on moving forward on a new agreement would, of course, require the votes of six other councilmembers, as well as input from the mayor.

As state law dictates how libraries are funded – that library operating levies are to be evenly applied across the library district – any change that would be more equitable to Edmonds taxpayers would have to go through the state Legislature. That, to say the least, would be challenging, as Teitzel admits.

The second option is to withdraw from the annexation contract from 2002 and consider contract services from Sno-Isle, as was done in the past.

“That would require a vote from the public, and significantly more analysis would be required before we consider that step,” Teitzel said. “Fees would be collected by the city – as was done prior to annexation – and reimbursed to Sno-Isle.”

A third option is to work with Sno-Isle to revise the terms of the annexation agreement to drive greater investment into the Edmonds library.

“If the city is hearing from library-district taxpayers who live in Edmonds that they are dissatisfied, city officials could choose to start the process of withdrawing from the library district as outlined in state law,” Hills said.

Woolf-Ivory said that it’s inappropriate for Sno-Isle to negotiate with the city of Edmonds on how taxpayers pay for services. “That’s a direct relationship between the library district and individual taxpayers,” she said.

“However, the annexation agreement does talk about specific things between district and the city of Edmonds that are appropriate and match requirements of how library taxes could be spent.”

Even if the city goes back to contract services, there’s no telling how much taxpayers would gain – or lose.

“Over the years,” Hills said, “the Sno-Isle Libraries Board of Trustees has consistently voted that cities or other areas that wish to contract with Sno-Isle Libraries for library services pay a rate that is equivalent to the property-tax rate paid by library-district taxpayers in unincorporated areas, incorporated areas that have annexed to the library district and other areas contracting for library services.”

 

 

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