Loading...
HomeMy WebLinkAboutAGENDA REPORT 2005 0202 CC REG ITEM 09AMOORPARK CITY COUNCIL AGENDA REPORT ITEM q • A. CITY OF MOORPARK, CALIFORNIA City Council Meeting ACTION: $f: By: TO: The Honorable City Council FROM: Mary K. Lindley, Director of Community Services: DATE: January 20, 2005 (Meeting of February 2, 2005) SUBJECT: Consider Alternative Recommendation for the Ventura County Library District Structure and Financial Policies On October 6, 2004, the City Council considered the Ventura County Library Services Commission's (Commission) study (Study) of the Ventura County Library's structure and financial policies. At that time, the Council expressed support for the current governance structure as contained in the Memorandum of Understanding (MOU), but opposed Option Four as identified in the study. Councilmember Clint Harper, who represents the City on the Library Services Commission, requested the City Council's reconsideration of the issue. The October 6, 2004, Agenda Report has been attached to provide background information regarding the current library structure and financial policies and the five funding options outlined in the Study. Four of the library member jurisdictions (Ojai, Port Hueneme, Simi Valley, and Fillmore) have expressed support for Option 4 of the Study. All but Simi Valley are currently in a deficit situation. In November 2004, the City of Camarillo expressed its opposition to Option Four, as did Moorpark in October 2004. The City of Ventura has not taken a position on the matter. As currently proposed, Option Four revises the return -to- source formula in use today. It also proposes a change to the Service Area boundaries so that they are based on "Areas of Interest" as used by LAFCO. There is only one The Honorable City Council February 2, 2004 Page 2 city within each area of interest, with the exception of the Las Posas area, which contains no incorporated city. This would essentially eliminate a County unincorporated library service area (currently identified as Service Area 8) . Lastly, libraries located in the same Area of Interest would be jointly managed to serve that community. Under Option Four, the return -to- source provision would be revised to apply only to property tax monies collected within incorporated areas or within an Area of Interest which does not include a city where a library already exists. This last provision was created to address the Piru and Oak Park Library Service Areas, which currently have existing libraries. As proposed, all of the unincorporated property tax collected in Piru and Oak Park would be designated to the two respective libraries rather than directed to the Library Commission for allocation as is proposed for the other Library Service Areas. For jurisdictions with only one library (this include all but Ventura and Ojai Service Areas), if additional revenue is needed to maintain the baseline service level beyond what can be supported by the incorporated property tax, the Commission would commit to allocating the necessary difference from unallocated unincorporated area property tax. All other unincorporated area property tax revenue would become discretionary and would be programmed by the Library Commission. Under the proposed revised return -to- source policy, the Moorpark Library would require additional funding (approximately $38,172) from the Commission's discretionary sources to maintain its current hours of operation (54 per week). The remaining approximately $65,844 from County unincorporated property tax in the Moorpark Service Area would be designated to the Commission to be allocated at its discretion. The Moorpark Library would still be required to serve the adjacent unincorporated areas without a guarantee of the unincorporated property tax it used to receive. If Option Four is implemented, the Library Commission has expressed a willingness to offer a waiver to the revised return -to- source policy to exclude the Camarillo Library Service Area, thereby allowing the Camarillo Service Area to keep all of the unincorporated property tax in its Area M: \MLindley \LIBRARY \Library Study Reconsideration ccagda 2- 2- 05.doc 000002 The Honorable City Council February 2, 2004 Page 3 of Interest and in the proposed Las Posas Area of Interest. The Commission has agreed to this concept because it has been told that the City of Camarillo and the County included the unincorporated property tax revenue in their library bond application. However, the State is not concerned with the source of funding, only that the funding be available for the long term. Which means that Camarillo could use its own local funds. The end result of the waiver would be that the Camarillo Library would receive approximately $432,995 in revenue that, if treated consistent with the other Service Areas, would be allocated to the Library Commission as discretionary funding under Option Four. If on the other hand, the Camarillo Service Area was not granted a waiver, but instead, as the only library in the Service Area that was allocated additional funds to maintain its current baseline service level from the proposed discretionary unincorporated property tax revenue that the Library Commission will manage, there would be approximately $252,000 available at the Commission's discretion. This $252,000 would go a long way in addressing the under funded libraries in the Fillmore and Port Hueneme Service Areas. Alternatives to the existing Option Four that the Council may wish to consider include: 1) that no jurisdiction be excluded from the revised return -to- source policy, or 2) a modified return -to- source policy be adopted whereby service areas would be allowed to keep fifty percent of the property tax revenue from the county unincorporated areas within its boundary (the other fifty percent would be available to the Library Commission for appropriations system wide). Additionally, the City would ask that Moorpark Library's baseline hours be permanently adjusted from 40 hours per week (medium library) to 54 hours per week (55 hours is allocated for large libraries) . As the Council may recall, under the current return -to- source policy, the City has used a large portion of the unallocated fund balance from the property tax collected in the Moorpark Service Area to increase the Moorpark Library's hours of operation to 54 hours a week. If the return to source policy is to be revised limiting the funds available to enhance the Moorpark Library, the City would M: \MLindley \LIBRARY \Library Study Reconsideration ccagda 2- 2- 05.doc -00 J o, The Honorable City Council February 2, 2004 Page 4 be looking for a commitment to retain the enhancement already in place. Either of alternate provisions provides greater equity since each service area would be treated the same. This would mean that the Camarillo Service Area would be treated like all of the other Service Areas. Additionally, with the second alternate provisions, Library Service Areas would retain some discretionary expenditures decisions to enhance local libraries based on local needs. Staff's position is to retain the action taken by the Council on October 6, 2004. The Council's action was to support the current governance structure, which include a MOU and representation from each member jurisdiction on the Library Commission. The Council also expressed its opposition to Option Four based on inequity concerns involving the exclusion for Camarillo and the loss of funding for the Moorpark Library. Nothing has changed since the Council's October 6 meeting other than Camarillo has taken a position in opposition to Option Four which does not make the resolution of the situation any more promising. Option Four does not address the overall funding difficulties, it leaves the decisions about service level cuts to the individual Service Areas rather than the Library Commission as a whole, and it creates new inequities (the Camarillo Library waiver) that do not exist today. The Library Commission will be meeting on February 3, 2005, to further discuss a formal recommendation regarding structure and financial policies. The purpose of this Agenda Report is to provide Councilmember Harper with direction so that he can convey the City's position. STAFF RECOMMENDATIOIN Make no changes to the City Council's October 6, 2004, action. Attachment: A - October 6, 2004, Agenda Report B - Library Commission Report, "Library Study" 000004 M: \MLindley \LIBRARY \Library Study Reconsideration ccagda 2- 2- 05.doc TO: FROM: DATE: ATTACHMENT MOORPARK CITY COUNCIL AGENDA REPORT The Honorable City Council Mary K. Lindley, Director of Community Services September 3, 2004 (Meeting of October 6, 2004) SUBJECT: Consider Ventura County Library District Analysis of Services and Fiscal Position Report and Recommendations SUMMARY The Ventura County Library Services Commission (Commission) authorized a study (Study) of the Ventura County Library's structure and financial policies in an effort to identify ways to address the current and future anticipated revenue shortfall. The lack of sufficient revenue places a strain on the Library and greatly reduces the service levels at its fifteen libraries. The draft Study (Attachment A), written by Management Partners, Inc., does the following: • outlines the current structure and status of the Library, • provides comparative service level and financial information about other library systems in California, • examines organizational structure scenarios, and • identifies five potential financial policy options for consideration by Library jurisdictions. The Library Commission has spent considerable time discussing the five funding options and to date the cities of Fillmore, Ojai, Port Hueneme, and Simi Valley have expressed support for Option Four in the Study. The Library The Honorable City Council October 6, 2004 Page 2 Commission is requesting to hear from the remaining member jurisdictions. BACKGROUND The current Memorandum of Understanding (MOU) creating the Library Commission and the current policies by which the Library is governed, were approved by the member cities and the County of Ventura in 1997. Under the MOU, the Library Commission is comprised of an elected representative from each of the seven cities within the Library system, and a member of the County Board of Supervisors. Councilmember Harper is the City of Moorpark's representative to the Commission. The Commission is "empowered to oversee the policy matters of the Library System and make recommendations to the Board of Supervisors ". This includes review and recommendation of the annual Library budget. The Board of Supervisors may override a recommendation of the Commission by a 4 /5ths vote. The MOU sets forth baseline service levels for hours at each library. The Library is divided into eight Service Areas. The Service Areas are comprised of one of the seven incorporated cities with a county library(ies) and the surrounding areas of interest, or in the case of Moorpark, the school district boundary. The remaining County unincorporated area (areas not otherwise included in the city Service Area) makes up the eighth Service Area. In 1998, the Library Commission approved a set of Budget Policies (Attachment B) . Among the policies are provisions that stipulate that the property tax generated within service areas shall be allocated to the respective service area (return -to- source) and that individual library operational cost increases due to expansion, renovation, or new construction of individual libraries, is the responsibility of the service area jurisdiction. It is generally viewed that the baseline levels set in the MOU and the return -to- source policy have created inequities when combined with the extreme cuts in key funding sources facing the Library today. M: \MLindley \LIBRARY \Library Study Recommendation ccagda 10- 6- 04.doc The Honorable City Council October 6, 2004 Page 3 The Study makes recommendations to alter the return -to- source policy along with restructuring the Service Areas' boundaries. The goal is to provide a maximum level of property tax revenue protections while providing the Commission with some discretionary budget decision it currently does not have to better balance services. DISCUSSION In summary, the Study focuses its findings in two areas: governance, and funding and service levels. The options and recommendations offered in the report have not been finalized and the Commission has not taken a position on which option(s) it favors, although a number of cities have expressed support for Option Four. While the specifics of the final recommendation (s) may change as the Commission receives comments from the cities and the County, the City of Moorpark is being asked to discuss and comment on the latest version of the Study. Governance: The consultant examined the various governance structures that counties use throughout the state of California. Some library systems operate as a department under a county operation. Others operate within a Joint Powers Authority between the participating incorporated jurisdictions or as a special district. A more common structure is the one adopted by the Ventura County Library, which is the use of a Memorandum of Understanding (MOU) or some other advisory structure to facilitate a role for the participating jurisdictions. The governance options are discussed in more detail in the Study. While the consultant believes that over the long term, the Library would have greater flexibility under a JPA, for the short term, it is recommended that the Library continue to operate under a MOU, revised to address funding and service level issues. The conclusion of the consultant is that the Library's energies are better spent on making revisions to the MOU that will help balance service levels, rather than undertaking significant reorganization measures at this time. M: \MLindley \LIBRARY \Library Study Recommendation ccagda 10- 6- 04.doc ')O0"). G"<+ The Honorable City Council October 6, 2004 Page 4 Funding and Service Levels: With the aforementioned recommendation to retain the MOU structure, the consultant looked at options to revise the MOU to address the funding and service level provisions, which when combined with the return -to- source policy, have led to system inequities. In addition to return -to- source, the MOU provides for baseline levels of service for each library in the system. It does this by classifying libraries as "Neighborhood" (Meiner's Oaks, Oak View, Piru, Saticoy, El Rio, Ventura Avenue), "Small" (Fillmore, Ojai, Oak Park, Prueter), "Medium" (Moorpark, Helen Wright), or "Large" (Camarillo, Simi Valley, Foster) and allocating hours for each classification. Weekly baseline hours of operation are as follows: "Large" - 55 hours, "Medium" - 40, "Small" - 24, and "Neighborhood" - 16. The baseline service hours conflict with the return -to- source budget policy when the property tax generated in a Service Area is not sufficient to support the service hours as stipulated in the MOU. The consultant considers the current structure as "facility- driven ". The MOU makes it very difficult for the Library Commission to respond to the reduced revenue by reducing services based on an objective set of priorities, because the return -to- source and the baseline hours -of- operation provisions tie their hands. The Library Commission has very little discretion concerning the allocation of services and revenue based on needs. The consultant identifies five funding options and recommends Option Four in the Study. Option Four revises the return -to- source formula in use today. It also proposes a change to the Service Area boundaries so that they are based on "Areas of Interest" as used by LAFCO. There is only one city within each area of interest, with the exception of the Las Posas Area, which contains no incorporated city. This would essentially eliminate a County unincorporated library service area (currently identified as Service Area 8). Lastly, libraries located in the same Area of Interest would be jointly managed to serve that community. Under Option Four, the return -to- source provision would be revised to apply only to property tax monies collected M: \MLindley \LIBRARY \Library Study Recommendation ccagda 10- 6- 04.doc The Honorable City Council October 6, 2004 Page 5 within incorporated areas or within an Area of Interest which does not include a city where a library already exists. For jurisdictions with only one library, if additional revenue is needed to maintain the baseline service level beyond what can be supported the incorporated property tax, the Commission would commit to allocating the necessary difference from unallocated unincorporated area property tax. All other unincorporated area property tax revenue would become discretionary and would be programmed by the Library Commission. Under the proposed revised return -to- source policy, the Moorpark Library would require additional funding from the Commission's discretionary sources to maintain its current hours of operation (54 per week) . If Option Four is implemented, the Library Commission has already been considering a waiver to the revised return -to- source policy to address a commitment made by the City of Camarillo and the Ventura County Library District when they applied for State Library Bond funds to build a new Camarillo Library. While the Library Commission and the respective jurisdictions did not approve the action, the use of the unincorporated property tax generated in the areas around Camarillo for the new Camarillo Library was identified in the Bond application, for which the City of Camarillo was awarded funds. The assumption was made that the Camarillo Library would have the use of these funds, since that was the return -to- source policy that was in place at the time. There is a feeling that this commitment should be honored. The end result of the possible waiver would be that the Camarillo Library would receive approximately $433,000 in revenue that, if treated consistent with the other Service Areas, would be allocated to the Library Commission as discretionary funding under Option Four. If on the other hand, the Camarillo Service Area was not granted a waiver, but instead, as the only library in the Service Area it was allocated additional funds to maintain its current service level from the proposed discretionary unincorporated property tax revenue the Library Commission will manage, there would be approximately $252,000 available at the Commission's discretion. The $252,000 would go a long way in addressing M: \MLindley \LIBRARY \Library Study Recommendation ccagda 10- 6- 04.doc 1 "10 0 )o,9 The Honorable City Council October 6, 2004 Page 6 the under funded libraries in the Fillmore and Port Hueneme Service Areas. The Study also states that the implementation of Option Four may assist the Library Commission in making the case for dissolving the agreement between the County and the City of Thousand Oaks. This agreement provides for payment to Thousand Oaks in the amount of $124,000 annually as compensation for the use of the Thousand Oaks Library by surrounding unincorporated residents. The $124,000 figure is the amount of property tax revenue generated in the unincorporated area around Thousand Oaks. It's important to note that even if Option Four were to be approved by all parties and implemented, the Library system would still be under funded by approximately $91,000 annually. To balance the budget, operational expenditures (hours) would need to be cut (reduce hours), or the Commission will have to use its shrinking reserves to over the short fall. Impacts on the Moorpark Branch Library: Currently, the Moorpark Service Area consists of the City's jurisdictional boundaries and the unincorporated areas within the MUSD boundaries. Over the last several years, the Moorpark Library Service Area generated more revenue than was needed to operate the Moorpark Library. On average, the financial status of the Service Area has been as follows: Revenue Expenditure Incorporated Prop Tax $443,000 Unincorp Prop Tax $ 57,000 Other Rev. $ 68,000 Annual Operating Costs $500,000 Annual Available Funds $68,000 The City has had approximately $68,000 per year, on average, to allocate towards library enhancements. In FY 2000/01, the Council approved the expansion of weekly operating hours from 40 to 54 hours per week (14 hours per week increase). This was an additional ongoing expenditure of approximately $20,000 per year. Additionally, each year M: \MLindley \LIBRARY \Library Study Recommendation ccagda 10- 6- 04.doc h,0 11 The Honorable City Council October 6, 2004 Page 7 the Council has been able to spend the remaining balance on library materials. If Option Four is approved by the Library Commission and the member agencies, it is assumed that the Moorpark Service Area boundaries would remain basically the same; however, the only funding guaranteed to the Service Area under the revised return -to- source policy would be the property tax generated within the City's jurisdictional boundaries, approximately $512,000, and other miscellaneous funds from donations and fines (approximately $70,000). The total revenue guaranteed to the Moorpark Library would be approximately $582,000. The property tax from the unincorporated property within the Service Area (approximately $66,000) would not automatically be allocated to Moorpark Service Area. The estimated cost to operate the Moorpark Library at 54 hours a week (14 hours above baseline) is $610,000. Under this scenario, the Moorpark Library would be under funded by $28,000. However, since the incorporated property tax is not sufficient to maintain the Moorpark Library's current service level of 54 hours, it is suggested that the Library Commission would commit to allocating the necessary funds (approximately $28,000) from unincorporated property tax to keep the library open 54 hours per week. The remaining unallocated balance generated from the Moorpark Service Area, approximately $38,000, would not be automatically available for use at the Moorpark Library, as is now the policy, but would be directed to the Library Commission for expenditures made at its discretion within the Library system. Revenue Expenditure Incorp Prop Tax $512,000 Misc. Revenue $ 70,000 Unincorp Prop Tax Allocation $ 28,000 Operational Cost (54 hour /week $610,000 Unincorp. Prop Tax to Commission $ 38,000 It is important to note that while the Library Director and the Study's author have indicated that Option Four includes 54 hours of operation per week for the Moorpark, rather than the baseline 40 hours as identified in the MOU, there M: \MLindley \LIBRARY \Library Study Recommendation ccagda 10- 6- 04.doc f 011.11t.,1 The Honorable City Council October 6, 2004 Page 8 has not been any discussion on the part of the Commission to this change. Therefore, at this time there is no guarantee that the service level for the Moorpark Library will remain at 54 hours per week if Option Four is approved. Staff recommends that the City Council direct Councilmember Harper to convey to the Library Commission that the City concurs with the recommendation to maintain the current MOU governance structure, but that it favors the status quo for Funding and Service Levels not Option Four. Option Four does not address the overall funding difficulties, it leaves the decisions about service level cuts to the individual Service Areas rather than the Library Commission as a whole, and it creates new inequities (the Camarillo Library waiver) that do not exist today. While it is recognized that the status quo leaves several libraries under funded (Fillmore, Ojai, Port Hueneme,and Ventura) and faced with significant service level cuts, Option Four, as proposed, does not resolve the overall funding and service issues and creates new imbalances. Offering the proposed waiver for the Camarillo Library Service Area regarding the revised return -to- source policy, places a greater burden on the other Service Areas. If Camarillo were treated the same as is being proposed for the other libraries, some of the property tax in the unincorporated area around Camarillo could be used to support the under funded libraries mention above (approximately $252,000) . If the Camarillo Service Area is allowed to retain the property tax generated from the unincorporated area in its Service Area, all of the other Service Areas should have that ability as well. The Moorpark Library has greatly benefited from additional expenditures the Council has been able to approve. While staff appreciates that situation that Camarillo finds itself in, mainly that it committed to building a new library under the assumption of the return -to- source policy that was in place at the time, the City of Moorpark also expanded its operating hours under the same policy and would like the opportunity to consider expanding its library based on the original return -to- source policy, with or without a state grant. The initial budget policy M: \MLindley \LIBRARY \Library Study Recommendation ccagda 10- 6- 04.doc D0 0 -):. The Honorable City Council October 6, 2004 Page 9 approved by the parties specifically stated that library enhancements would be made at the risk of the respective Library Service Area. The purpose of this provision was to ensure that a Service Area was not able to increase its operating allocation and place an increasing financial burden on the remaining Service Areas. The City of Moorpark has recommended library enhancement with the full understanding that if funds decrease, the City will have to make a decision to reduce service levels or find alternative funding. Until the Commission resolves the issues of equity on the return -to- source policy, staff believes the status quo should remain in place. STAFF RECOMDSNDATIOIN Direct Councilmember Harper to express the City's support for the current MOU governance structure and its opposition to the Funding and Service Levels Option Four at the next Library Commission meeting. M: \MLindley \LIBRARY \Library Study Recommendation ccagda 10- 6- 04.doc _ ATTACHMENT d LIBRARY STUDY The Ventura County Library was heavily impacted by the state shift of property taxes, starting in 1991/92. In addition to the property tax loss of approximately $1,000,000 per year, the library system also lost, at that time, its Special District Augmentation Fund revenues, amounting to approximately $5,000,000 per year, which had been received from the county since the legislature implemented SDAF payments to counties, post- Proposition 13. The loss of almost 50% of the library district's income threw the system into turmoil, from which it emerged in 1998, with the signing of a Memorandum of Understanding between the seven cities served by the county library system, and the county. The MOU established a Library Services Commission, composed of an elected member from each city, and one from the Board of Supervisors. It also set out roles and responsibilities for the members. Budget policies, a guide to day -to- day operations, were established. The MOU and the Budget Policies were grounded in two basic principles, a base level of service for each facility, and return to source, the return of property tax generated in a jurisdiction to the facility or facilities serving that jurisdiction. Several jurisdictions, Camarillo, Moorpark, Oak Park, and Simi Valley, generate more property tax than has been needed to run the libraries in those areas at the base level: any "surplus" has been available for use by the jurisdiction for any library purpose. These two principles, base level of service and return to source, were in conflict from the inception of this new structure, since several jurisdictions, namely Fillmore, Ojai, Port Hueneme, and the city of Ventura, did not generate enough property tax to run the libraries within their boundaries at the base level. Neither did the libraries in the unincorporated areas of El Rio, Meiners Oaks, Oak View, Piru, and Saticoy, though that has changed over time. In order to address this problem, the one major non -local revenue source the library system receives, the state Public Library Fund subvention, was pledged to cover the remaining costs of operating the libraries in the areas that did not generate enough local revenues of their own to meet the minimum service standard. To facilitate return to source, "service areas" were established for each facility, boundaries of both the incorporated and unincorporated area from which revenue would be drawn to support a particular library or libraries. It was assumed that people within the service area would use a particular library, hence the assignment of revenues. Agenda Item 6 ) 00 )l4 Service areas were also established for the libraries in the unincorporated area. A significant portion of the county remains in no particular service area, though revenues from the unincorporated area surrounding the city of Thousand Oaks currently go to that city, to support municipal services presumably used by the unincorporated area residents. In 1998/99, and for several years following, the shortfall for the libraries in Fillmore, Ojai, Pt. Hueneme, Ventura, El Rio, Meiners Oaks, Oak View, Piru, and Saticoy was made up by using state money, the Public Library Fund (PLF), to backfill their deficits. In addition, county Community Development Block Grant funds were available for some libraries in the unincorporated area. When the PLF was cut several years in a row, as part of the state's efforts to find a way out of its own fiscal crisis, the MOU and Budget Policies adhered to by the county library system could no longer be followed. While the MOU worked as long as there was state funding to backfill those cities that operate in deficit mode, it has become "broken." Although the system has been able, through the use of fund balance, to avoid service cutbacks and a system -wide reduction in force, those possibilities must be faced, again, in the coming budget year, 2005/2006. In 2004 the county hired a consultant to work with the Library Commission and staff to develop any possible means of modifying the MOU or making other changes that would enable the system to do a better job of providing service countywide. The consultant found, among other things, that the Ventura County Library is among the poorest county systems in the state, for counties with a median income of $50,000 or above, and that it has an extremely low level of staffing, which guarantees a low level of service. The consultant's final report included five options with regard to funding and service levels: • Option One: Status Quo • Options Two: Change PLF Allocations • Options Three: Implement Formula Allocation Mechanism • Option Four: Discontinue the Return to Source Formula for Certain Unincorporated Areas • Option Five: Modify the Return to Source Provisions to Exclude Motor Vehicle In -Lieu User Fees and Interest Earnings Presentation and discussion of all options brought the focus to Option Four. which recommended discontinuing the return to source formula for those unincorporated areas surrounding cities. Agenda Item 6 100111)1 Excerpt from "Ventura County Library, Analysis of Service and Fiscal Position" (June 2004) Option Four. Discontinue the Return -to- Source Formula for Certain Unincorporated Areas The fourth option is to discontinue the return -to- source formula for those unincorporated areas surrounding cities. This would be the most far reaching way to address the problems facing the Library system today. Under this approach the return -to- source provisions of the MOU would be revised to apply only to monies collected within incorporated areas or within an Area of Interest which does not include a city where a library already exists. Revenues derived from the unincorporated areas would then become discretionary and be programmed by the Library Commission in two ways: 1) To provide services to unincorporated residents who do not have a nearby city library 2) To ensure that all libraries can provide a minimum standard of service. A fundamental premise of this approach is that the notion of service areas based on political jurisdictions would be replaced with the use of Areas of Interest. These are official boundaries recognized by the county and all the cities in the county that represent "communities of interest." A very important policy associated with Areas of Interest is that there will only be one city within each area of interest. (Option 4, continued next page) Agenda Item 6 The current Areas of Interest within the county are shown in Figure 12 below: FIGURE 12: VENTURA COUNTY AREAS OF INTEREST Under this approach libraries in the same Area of Interest would be managed jointly to serve the community. Under the current system libraries located in separate service areas are managed independently, even if they are in the same community. For example, the Ojai Library and the Meiner's Oaks Library are located just over two miles from each other and yet because they are in separate service areas they are subject to separate management and funding rules. If this option were to be implemented, the Library Commission would recommend the use of unallocated revenues to cover operating expenses at the branches. The Commission could also choose to recommend reducing expenditures by changing the delivery of services within an area. Under this approach, approximately 60% of total funding is subject to return -to- source restrictions and will be dedicated to the incorporated areas. (Option 4, continued next page) Agenda Item 6 Benefits and considerations surrounding this option include the following: ■ Transitioning to such an approach would not require any changes in the existing allocations. • The Library system operated for many years in a successful manner without the need for a funding allocation; some discretion is not out of bounds. • Cities and Ventura County would both be contributing to this pool of discretionary funding in roughly equal amounts. • Cities can and should have control of monies collected in the incorporated area, and this system would preserve this return -to- source guarantee. However the rationale for cities having return -to- source control over monies generated in surrounding unincorporated areas is much more tenuous and this system would vest making recommendations over the use of such funding with the Library Commission. • This approach would provide a framework for resolving the Thousand Oaks contract funding issue and could be used to prevent further such agreements. • Cities are the municipal service provider in their Area of Interest according to county policy. Therefore, to the extent that unincorporated communities exist, they are not expected to grow into municipalities. This reduces the rationale for the library serving as a civic focal point or "city hall." The main problem with this approach would be the fact that cities would lose automatic return -to- source control over tax proceeds generated in surrounding unincorporated areas. Table 15 below provides an estimate of what this differential would be. (Option 4, continued next page) Agenda Item 6 D00`` :18 TABLE 15: EFFECT OF SHIFTING UNINCORPORATED TAX DOLLARS FROM CITY CONTROL Percentage of Property Tax Property Tax Generated in Total Generated in Unincorporated Service Cities Service Area Area (estimate) Area Tax (estimate) Camarillo 28.8% $1,440,848 $1.025.786 3 Moorpark 11.4% $553,527 $490,427 Zj 5 Port Hueneme 55.0% $293,195 $131,962 Ventura 11.9% $1,489,820 $1,312,426 Property Tax Generated in Unincorp. Areas (estimate) $414,964 pF $63,102 $161,257 m $177,289 The county would also lose automatic control over funds generated in unincorporated areas, within Areas of Interest which do not include a city (return - to- source would still apply to Oak Park and Piru on the same basis as in an incorporated city), or which are within an Area of Interest which includes a city. To address concerns, the Library system should amend its budget policies to provide an agreed -upon structure for the Commission's allocation of property tax, such that it would be clear that service to unincorporated residents served from a library located in a city should be a heavily weighted factor when it comes to making budget decisions. In addition a budget policy should be written that would prohibit reductions of service in areas that have only one facility. While this will significantly reduce the potential discretion of the Commission, in reality service reductions in areas which currently have only one library could not be justified when other areas have more than one branch. It is also thought that this policy would be necessary to allay threshold concerns that some members may have with regard to loosening up the return to source restrictions. In addition the Los Posas Area of Interest revenues would be pledged to Camarillo, because this Area of Interest was created after the Library MOU. ZM Agenda Item 6 The consultant found no practical way to increase library district revenue. This modification to the existing process does not wipe out existing deficits. It does have the advantage of giving the Commission some say over the library system as a whole. In the present set -up, each jurisdiction is independent as to funding and running its own library, or libraries. By giving the Commission some flexibility, existing service level inequities could be addressed over time with an eye toward giving all areas of the system at least some minimal level of service. The current system basically locks into place the library system as it existed in 1996 and, as the consultant pointed out, due to the nature of the county's development (from west to east), older cities such as Ventura and Ojai have relatively more library service, although even this is lower than average. As a result of the formula- driven system, the Commission does not have the option of improving the efficiency of the system, or of prioritizing service delivery on a rational, regional basis. The choice of Option 4 would also provide a policy basis for ending the contract with the city of Thousand Oaks, since under this option no city would receive unincorporated area property tax. Option 4 does not eliminate the existing service area, and their boundaries, but separates incorporated city boundaries from the contiguous unincorporated area. The consultant suggested that Areas of Interest, geographic areas used as part of the guidelines for orderly development adopted by the county and the 10 cities and the Local Agency Formation Commission, could provide a conceptual overlay to the service areas, another way of allowing the Commission to view the library system in discrete areas, but with connections between libraries in those areas, as opposed to the current independent facility model. There was never any intention to substitute the boundaries of the Areas of Interest for those of the service areas. This is a way of looking, not a way of funding. Option Four, like all the other possibilities considered in the study, is based on the current level of service provided by means of property tax revenues. The report, at the request of Commission members, also contains the following recommendations: Recommendation 3: Library staff should develop a program to work with each city to maximize any market based revenue opportunities which might exist at that city's facility(s). Staff is willing to work with cities on any programs to benefit libraries. Agenda Item 6 ')00`,)20 Recommendation 4: Develop a development impact fee for the acquisition of books and materials and technology. This recommendation does not appear to be workable. The county has a policy of steering development to incorporated areas, so there is little use for such a fee in the unincorporated area. Cities have a variety of comments on such a fee: some would prefer to develop their own city fees, while others either have such a fee in place or see so little future development that they do not wish to take part in any countywide effort. Actions: 1. Recommend approval of Option Four. 2. Recommend approval of market based initiatives, where appropriate. 3. Recommend that cities add development impact fees for library service as appropriate. The Board of Supervisors will be advised of Commission action on this item, as required in the MOU. Agenda Item 6 VENTURA COUNTY LIBRARY DISTRICT ANALYSIS OF SERVICE AND FISCAL POSITION OPTION 4 A B C D Property Taxes Other Appropriations Incorporated Unincorporated Total Property Revenue/ Includes Total Needed Includes Status Available for (Estimate)* Taxes Donations Revenue Donations & Commission &Grants Grants Camarillo * $1,070,459 $432,995 $1,503,454 $251,013 $1,754,467 $1,502,312 $252,155 $0 Fillmore $57,297 $34,820 $92,117 $64,531 $156,648 $207,925 - $51,277 $34,820 Moorpark $511,735 $65,844 $577,579 $70,555 $648,134 $609,962 $38,172 $65,844 Ojai $117,179 $105,594 $222,773 $248,872 $471,645 $551,496 - $79,851 $105,594 Port Hueneme $137,671 $168,264 $305,935 $241,399 $547,334 $604,849 - $57,515 $168,264 Simi Valley $1,366,168 $128,545 $1,494,713 $288,356 $1,783,069 $1,743,087 $39,982 $128,545 Ventura $1,369,573 $184,993 $1,554,556 $492,123 $2,046,679 $2,220,167 - $173,488 $184,993 El Rio $0 $78,669 $78,669 $14,708 $93,377 $84,022 $9,355 $78,669 Meiners Oaks $0 $93,248 $93,248 $25,228 $118,476 $118,476 $0 $93,248 Oak Park $0 $268,282 $268,282 $17,848 $286,130 $263,646 $22,484 $268,282 Oak View $0 $84,048 $84,048 $16,269 $100,317 $122,328 - $22,011 $84,048 Piru $0 $25,551 $25,551 $13,839 $39,390 $64,807 - $25,417 $25,551 Saticoy $0 $19,499 $19,499 $10,645 $30,144 $101,046 - $70,902 $19,499 Other Unincorp $0 $403,433 $403,433 $403,433 $124,100 $279,333 $403,433 $4,630,081 $2,093,786 $6,723,857 $1,755,386 $8,479,243 $8,318,223 $161,020 $1,660,789 +The City of Camarillo submitted an application for state library bond act funding. The application, which cannot be changed at this later date, presupposed the complete use of the unincorporated area revenue to support the larger library. FY04 -05 surplus analysis mgmt partners plan 9/1/2004 Analysis 4:48 PM VENTURA COUNTY LIBRARY DISTRICT ANALYSIS OF SERVICE AND FISCAL POSITION OPTION 4 Allocation of Unincorporated Taxes to Meet Additional Financing Requirements Unincoporated Area Property Taxes - Commission Discretionary Funding Required for Base Level of Service Available to Commission Camarillo • Fillmore $0 $34,820 $0 - $86,097 $0 - $51,277 Moorpark Ojai $65,844 $105,594 - $27,672 - $185,445 $38,172 - $79,851 Port Hueneme Simi Valley $168,264 $128,545 - $225,779 - $88,563 - $57,515 $39,982 Ventura $184,992 - $358,480 - $173,488 El Rio Meiners Oaks Oak Park Oak View Piru Saticoy Other Unincorp $78,669 $93,248 $268,282 $84,048 $25,551 $19,499 $403,433 - $69,314 - $93,248 - $245,798 - $106,059 - $50,968 - $90,401 - $124,100 $9,355 $0 $22,484 - $22,011 - $25,417 - $70,902 $279,333 $1,660,789 - $1,751,924 - $91,135 +The City of Camarillo submitted an application for state library bond act funding.The application, which cannot be changed at this later date, presupposed the complete use of the unincor orated area revenue to support the larger library. FY04 -05 surplus analysis mgmt partners plan 9/1/2004 Financing Requirement 4:54 PM RWO)R24 VENTURA COUNTY LIBRARY FUND 1075 5861 CAMARILLO 5862 FILLMORE 5863 MOORPARK 5864 OJAI 5865 PT. HUENEME 5866 SIMI VALLEY 5867 VENTURA 5881 EL RIO 5882 MEINERS OAKS 5883 OAK PARK 5884 OAK VIEW 5885 PIRU 5886 SATICOY 5887 UNINCORP. TOTALS 200512006 PROJECTED BUDGET PROJECTED PLF/ TRANSFER APPROPRIATIONS REVENUES SURPLUS DEFICITS IININCARP REMAINDER SIIRPI IIC nF=l=l _ITC $1,549,011 $1,844,608 $295,597 $0 $0 $295,597 $0 $214,077 $133,466 $0 - $80,611 $19,524 $0 - $61,087 $630,216 $682,419 $52,203 $0 $0 $52,203 $0 $572,880 $445,049 $0 - $127,831 $31,491 $0 - $96,340 $618,683 $533,342 $0 - $85,341 $20,670 $0 - $64,671 $1,796,673 $1,872,520 $75,847 $0 $0 $75,847 $0 $2,397,468 $2,042,053 $0 - $355,415 $86,082 $0 - $269,333 $86,502 $86,502 $0 $0 $0 $0 $0 $121,805 $121,805 $0 $0 $0 $0 $0 $272,699 $302,152 $29,453 $0 $0 $29,453 $0 $125,769 $105,315 $0 - $20,454 $20,454 $0 $0 $66,764 $40,876 $0 - $25,888 $25,888 $0 $0 $104,138 $31,491 $0 - $72,647 $72,647 $0 $0 $131,546 $434,113 $302,567 $0 $183,578 $0 ell Z FY05 06 Projections - LC t 05 -06 Proj Summary ;p0,000,LJ1 �O,b /�, /7 "1 ;0100,bb/ - a /b0,'10/ z0L /b, /0b 4ib3b,blS - 44137,439 1/21/2005 9:25 AM