A restructuring of two loans for the Argenta Branch Library will put back nearly $625,000 over the next two years into the financially troubled William F. Laman Public Library System under an agreement library trustees and North Little Rock city officials worked out in a special meeting Tuesday.
The new loan structure, if formally approved as expected by Centennial Bank, city officials said, would have the North Little Rock Public Building Authority pay interest-only annual payments due Thursday and Jan. 1, 2016.
The difference of $312,358 in each of the new payments in 2015 and 2016 -- $624,716 over the two years -- is to go back into the library's operations, Mayor Joe Smith said, providing the independent public library system with additional cash on hand.
The city also will request that two bond payments, both due Jan. 1, 2023, be extended to 2025, which would eliminate balloon payments in 2023 of $282,610 and $922,381 on the two loans, respectively. The extended two years would add $38,208 to the payments for the charged interest over the two additional years, city Finance Director Karen Scott said.
The library pays the loan amount to the city's Public Building Authority, which obtained the loans and then pays the bank. A separate loan for the system's main library to be paid off in 2017 remains unchanged.
The city also will help the library by providing assistance from the city attorney's office, Finance Department and maintenance to save the library system from spending money to hire those professional services, Smith said.
"This is to help you manage some of your expenses with some of our people," said Smith, who led the joint special meeting of the Public Building Authority and the Laman Library board of trustees that also was attended by several city administrators, bond counsel and a Centennial Bank representative. "We think we can save you a tremendous amount of money in 2015."
In November, library system officials announced 11 staff members would be laid off, effective Thursday. The library also reduced hours, beginning Dec. 1, at both the main library, 2801 Orange St., and the Argenta Branch, 420 Main St. Cutbacks also include at least a temporary cancellation of several public programs, of the annual Laman Library Writers Fellowship Grant and of some national touring exhibits the library system regularly hosts, which are free to the public.
At Tuesday's meeting, the seven trustees unanimously voted to approve a request for the Public Building Authority to restructure the loans in such a way that payments for the next two years would be interest-only instead of also paying on the principal.
The Public Building Authority's two present members, with member Randy Johnson absent, then voted to ask Centennial Bank to restructure the loan and an amended request for the two-year extension. Smith said earlier in the meeting that the bank had informally agreed to rework the loans.
"I think a big thank you is in order," trustee Esther Crawford said when the library board adjourned.
The financial hit for the library system, administrators have said, comes from two loans for $782,500 and $2,717,500 taken out in December 2012 for the purchase and renovation of the former downtown post office to convert it into the Argenta Branch. The branch opened in April. The principal balances on those loans are $718,434 and $2,478,808.
The original annual payments are $98,260.33 and $316,139.98. The restructured payments are to lower those payments to $31,395.61 and $70,646.68, Scott said.
After the November announcement, some library trustees asked Smith how the city could help, the mayor said. The Laman library system is independent of the Central Arkansas Library System, based in Little Rock, and doesn't receive operating funds from North Little Rock for its $3.2 million budget.
"They're part of our family," Smith said after Tuesday's meeting at the library system's Main Branch about the city's relationship with its only public libraries. "They need our strength and our assets, which are our people, our professional staff."
The mayor added that there are "not really" any "catches" to the plan, but that all checks written by the library will now require a signature from him, Scott or Danny Bradley, the mayor's chief of staff.
"All checks out of the library will be signed by two people," including a delegated library system official, Smith explained to the trustees. "This is not because we don't trust anybody. If we can see all of the invoices and expenditures, we can see what the expenses are and what the checks are for, so we have a better handle on the expenses. We will use our management expertise and help y'all come in under budget."
"The mayor's office and the city are not trying to take over the management of the library," Smith said at another point. "We will not be here to look over your shoulder."
The changes won't save the 11 jobs or bring back the former hours of the libraries, Smith said, adding that additional cuts aren't planned.
"I know the rumor's getting started that we called this meeting because we were going to fire everybody," Smith said. "Nothing is going to change. All we're doing is tightening out belts. And we're going to make this work.
"I think by midyear we're going to have a pretty good idea in our opinion of where you are and what your future looks like," he said. "We'll help you to make a five-year plan."
Trustee Nancy White told the mayor that the library "is not beyond fundraising" if needed to help restore some programs, but that the board appreciated the city's assistance.
"We're looking forward to this relationship," Smith said in reply. "I don't know how the city and the library grew so far apart over the years. This is a shining star for North Little Rock. But we've got to keep that line of communication open."
Metro on 12/31/2014