Law allows library to borrow funds
A change in the understanding of library law could make it easier for the Geneseo Public Library board to build a new library.
The library board is $900,000 short of its $3 million fund-raising goal. To help meet that benchmark, the library board would like to take out a $500,000 mortgage.
However, under previous understanding of library law, the board would be unable to take out a mortgage without a referendum, even if no tax dollars would be used to pay for the mortgage.
Fearing a referendum would be difficult to pass, board members felt they had no choice but to continue to try and raise the remaining dollars through fund-raising.
The initial interpretation of the law was given to the board by their local attorney, John Bean of Nash Nash Bean &?Ford LLP in Geneseo.
However library law specialist, attorney Phil Lenzini of Kavanagh, Scully, Sudow, White & Frederick?P.C. of Peoria, disagreed.
“He works with a number of libraries, and he said I’d mis-read the statute,” Bean told the board at its Jan. 4 meeting.
Bean said he re-read the law a number of times and consulted with his partners, unable to see how Lenzini was interpreting the law.
“Then I put a period in the last sentence, and it was like a light bulb went off,” said Bean. “The board can take out a mortage if it has access to funds in its current and future levies, without exceeding the maximum levy authority, to pay for it.”
To do so, an ordinance authorizing the board to borrow money and specifying the interest rate and payments will need to be enacted.
“You can go ahead and borrow, assuming you can find a financial institution willing to fund the project. I stand corrected,” said Bean, adding the term of the loan cannot exceed 20 years.
Though borrowing funds to pay for a library now is an option, Bean cautioned the board. “It’s very easy to borrow money, but very difficult to pay it back. You’ll have to look at your numbers and push the pencil very hard,” he said.
“The banks will want to know your financial information. They want to know your plan and what you’re going to cut in order to pay for the building,” he said.
Bean urged the board to remember that though the $3 million price tag is for construction of a new library, it does not cover items such as furnishings, a telephone system, increases in heating and cooling costs or other expenses.
“There’s a whole multitude of factors you have to consider before you decided to proceed,” said Bean.
A library similar to the one planned for Geneseo was recently constructed in Harvard, Ill. The board plans to consult with the Harvard library director to get an idea of cost increases associated with a new building.
To proceed with construction of a new library, the Geneseo board must authorize its architect, Alan Armbrust to draw up construction documents, however, at the advice of their attorney, the library board has been unwilling to authorize the documents until it knows how to pay for the building.
“It’s a Catch-22,” said Bean.
The board would like to start construction of a new library later this year. To do so, Bean said, the go-ahead must be given to the architect within the next two or three months.
“(Alan) said it will take him four months to complete the documents and the bidding specs. If you want to build in 2010, you have to make a decision in the next few months. Much past that, and you’re looking at 2011 before you actually start,” said Bean.
“I think it’s mandatory this new library get built in 2010,” said library board member Dr. Jan Dyke. “Interest rates are at historic lows. I think it will be to our disadvantage if we wait, we don’t want to look back in a year and say, ‘We should have put the acceleration on.’”
At its Jan. 4 meeting, the board authorized library president Gary Zum Mallen, treasurer Dave Johnson and its attorney to make inquiries with local financial institutions about possible mortgages.
“Until we know the bank rates, we won’t know if this is even feasible,” said Zum Mallen.
“But there is hope,”?added board member Darline Holland.
The board also authorized Bean to start work on an ordinance allowing the library to borrow funds, should that decision be selected.
At the Jan. 4 meeting, the library board also:
• Voted 6-0 to increase the cost of color copies from $.25 to $.50. Library director Claire Crawford said the increase was needed to cover the library’s cost for the copies. The board also voted 5-1 to increase the cost of black-and-white copies from $.10 to $.15. Board member Holly McAvoy voted against the change. Prices for copies will be increased as of Feb. 1.
• Met in executive session to discuss possible candidates to replace the late Jim Hale, a board member who died Nov. 26. No action was taken following the executive session.
• Changed the date of the board’s February meeting from Feb. 8 to Feb. 15.