January 2003 Board Minutes

Thorntown Public Library

124 N. Market St.,
Thorntown, IN 46071
Phone: 765-436-7348 Fax 765-436-7011

President Eric Ragsdale called the meeting to order at 6:03 pm. Members in attendance were: Deanna Brueggert, Teresa Carter, Ron Guinn, John Merson, Patty Ramsey, and Linda Yoder. Also present were Library Director Karen Niemeyer and Treasurer Barb Darnell.

Minutes of the January 14, 2002, Finance meeting were reviewed. After a motion by Ron and a second by Patty, the minutes were approved.

John moved the Board appoint Eric Ragsdale as president and Linda Yoder as secretary for the 2003 year. Deanna seconded the motion, and the motion carried.

Patty made the motion that the treasurer’s 2003 salary should be set at the budget figure of $5,356. After a second by Teresa, the motion passed.

Karen recommended we continue to advertise our budget in the Lebanon Reporter and post a copy of the proposal at the library door, in the bank and at the pharmacy, as previously approved by the State Board of Accounts. Deanna moved to continue the practice, Ron seconded it, and the motion was approved.

In the treasurer’s report, Barb Darnell reviewed the Register of Investments. The grand total of all funds is $580,854.31. She noted that two of the certificates of deposit would need to be reinvested this year: the 7-month LIRF CD currently invested at 2.45%, which matures February 20, 2003, and the 49-month operating CD at 4.9%. The State Board of Accounts has advised us that two years is the maximum amount of time for an investment. The 49-month CD has been in effect for nine months, and penalty free transfers are permitted after one year. The Board directed Barb to check with the State Board of Accounts to see if we could be allowed to keep the money in the longer term CD for a total of two years since other options are at a much lower interest rate.

After a review of our current investment policy, Patty moved that we limit our investments to certificates of deposit, getting rates from three different sources for comparison purposes, and aiming, within the bounds of fiscal responsibility, to keep our investments within the community. John seconded the motion, which was approved.

After a motion by John and a second by Teresa, the Board of Finance voted to adjourn at 6:15 pm.

President Eric Ragsdale called the meeting to order at 6:02 pm. Members in attendance were: Deanna Brueggert, Teresa Carter, Ron Guinn, John Merson, Patty Ramsey, and Linda Yoder. Also present were Library Director Karen Niemeyer, Clerk of the Works Craig White, Financial Advisor Lonnie Therber, and Bond Counsel Jeff Qualkinbush.

Because of a schedule conflict, the agenda order was reversed. Lonnie Therber presented an analysis of the financing options in terms of the number of years. Because the current method of calculating taxable value of property is in the process of changing, Lonnie emphasized the tax impact for a homeowner based upon his current year costs before, and after, the proposed project. Overall, a taxpayer will see a maximum increase of 11.3 cents, per $100 of assessed value, if the financing covers a 15-year period. Going another 5 years would decrease the cost to the taxpayer by only a penny and would greatly increase the interest expenditure to be paid.

Eric reported that Home National Bank would be willing to buy all of the bonds. This would produce a savings of approximately $70,000 because there would be no need for a public offering and the accompanying costs. According to Jeff Qualkinbush, the only potential drawback to this plan would be if the bank had to charge higher rates in order to complete the deal. Assuming equal rates, whether from the private placement or the public offering, the private placement is the better choice. The final decision does not have to be made until late April or early May, providing time to make the best choice for the taxpayers.

Lonnie advised that a lease term can always be shortened but cannot be extended. We were also assured that prepayments could be negotiated with the purchaser if the maturity date is at least fifteen years; in that case, prepayments would not be allowed until the bond had been in effect for at least ten years. He also suggested that, in the event we had additional money available at the beginning of the project, we would be better off to add that to our sources of financing and take out a lower bond amount than to set money aside to try to pay off the loan early.

John moved and Deanna seconded that we commit to a 15 year financing term. The motion carried.

Jeff reviewed our financing options: grants, cash on hand via the Public Library Capital Projects Fund/Library Improvement Reserve Fund, General Obligation Bonds purchased by the library, and First Mortgage Bonds issued by a nonprofit building corporation. While Karen will continue to pursue local grant opportunities, there does not appear to be potential for large amounts. The General Obligation Bonds would not provide us with the amount that we need due to the 2% cap based on assessed valuation. Our remaining option, then, in addition to cash on hand, is to establish a building corporation which will lease the new facility to us until all of the debt is paid. At the conclusion of the lease, the ownership of the building transfers to the Library.

Whether we opt for a private placement or a public offering, the same procedure will be followed for the next few months. If we choose the public offering, an additional week to ten days will be needed for the sale of the bonds. Jeff also told us that rental interruption insurance and property damage and construction insurance will be required as well as the builders’ risk insurance which is part of the original cost. These additional insurance policies will provide money to rebuild if the library becomes unavailable for use due to a fire, tornado, or other similar event as well as provide the bond interest to the purchaser during the time that the library cannot be used.

Jeff reminded us that the Common Construction Wage meeting must be held prior to March 27. He also noted that failure to agree to the Department of Labor rate recommendation could result in a six-month delay.

The Clerk of the Works contract was reviewed. Deanna moved, and Ron seconded, to accept the contract and the two accompanying schedules as revised. The motion passed.

Karen presented a floor plan for the second floor, indicating the library can fill it with existing furniture, with the exception of minor items. Work is also progressing on the first floor plan, including a portable stage for the youth area, and again there should be sufficient furniture available. The Board appreciates the tax savings that will result from not having to make substantial additional expenditures.

124 North Market Street, Thorntown, IN 46071; Phone: (765)436-7348 Fax: (765)436-7011;
Email: lwhite@thorntown.lib.in.us