With a branch library expansion in North Little Rock's downtown, numerous community functions, museum quality exhibits and an annual writers fellowship, the independent William F. Laman Library System has been praised for its innovation and for offering a valuable public service.
But innovation often comes at a cost. Late last year, with the library's budget stretched too thin, things came crashing down.
Library hours had to be curtailed Dec. 1 at both the main library, 2801 Orange St., and the new Argenta Branch Library, 420 Main St., and 11 staff members lost their jobs as of Thursday. An annual writer's fellowship for Arkansas authors was canceled, and programs and exhibits for the next two years will be downsized or eliminated.
Through the first 11 months of 2014, the library showed a $516,815 deficit in its $4.3 million annual budget. The 2015 budget has been reduced to less than $3.2 million.
North Little Rock's government, which doesn't fund any of the library's operations, has stepped in to help the library system find its footing over the next two years or so, Mayor Joe Smith confirmed last week.
The Laman Library System also is independent of the Central Arkansas Library System, which is based in Little Rock.
At a meeting last week between the city's Public Building Authority and the Laman Library board of trustees, Smith said he wanted to focus on "what happens next" with the library system, instead of how it ended up in financial trouble.
What happened, Smith said afterward, is that the library may have tried to do too much with too little funding under former Executive Director Jeff Baskin, who died Sept. 9, less than two months after he was diagnosed with an advanced stage of cancer.
Baskin -- who was often praised for his innovations and the services offered at Laman Library and who had worked for years to acquire the former post office building for a downtown branch -- might have had a plan, Smith said, to keep the system above water financially. Any such plan dissipated with his death.
"My opinion is, I think it was the intent of the director to pay the difference from the cost of the construction and the loan out of the library's operating funds, because he didn't want to borrow $3.7 million, he wanted to only borrow $2.7 million, to keep the loan low," Smith said. "Once the branch was open, there wasn't enough money in operations to pay either of the loan amounts. So, they quickly ran out of cash.
"His intent was to keep the loan as low as possible, but what was needed in the amount of cash available to make up the difference wasn't there."
The library's board of trustees, which oversees the system's operations and finances, also should "realize now that they really needed to be an active participant in the money management of the library," Smith added.
So now the city is offering to help the Laman Library System.
The most significant assistance is restructuring two loans for $782,000 and $2.71 million that were taken out at the end of 2012 to purchase and renovate the 83-year-old former downtown post office building into the Argenta Branch, which opened in April.
Through the North Little Rock Public Building Authority, two annual loan payments for the Argenta Branch have been changed to be interest-only for 2015-16, with no principal to be paid those two years.
The restructuring will save the library system $624,716 over the next two years, with the loans also extended two years to come due in 2025, an agreement approved by Centennial Bank on Wednesday. The loans will return to their normal debt payment schedule in 2017. The change immediately puts $312,358 back into the library's 2015 funds.
"This will give the [principal payment] back to the library to go back into the library's operations money," Smith said last week. "Over this two-year period, you'll have over a half-million dollars in savings.
"If we run into issues in 2017, we'll fix it. I don't know how, but we'll fix it."
The only caveat for the city's financial assistance, Smith said, is that a city representative will co-sign all checks written by the library. He said the move was intended to better manage the library's expenses, not to be "looking over [the library's] shoulder."
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.
"The city is going to help them out with their overhead," Smith said after the meeting. "If the partnership works like I think it will, I think this might become the norm. I think we all realize we can help save some taxpayer dollars as partners."
Metro on 01/04/2015