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Providence Public Library issues


magoldbe

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The PPL is apparantly in grave financial trouble and they may close 2/3 of their branch libraries. They are closing my local branch in Olneyville Square.

Ellen Schwartz, an accountant from the South Side who has been very active in the struggle to save the libraries, sent the following letter to the ProJo after taking it upon herself to do some research into the finances of the library, which are public record since the library is a non-profit. Her research does a great job of calling the library out on their public statements. Here's a letter she submitted to the ProJo...

Is the Library Really Broke?

I am a resident of Washington Park and a volunteer tutor with the after school homework club that used to meet at the Washington Park Branch of the Providence Public Library (PPL). When the library informed the residents that it was closing the branch because of structural damage to the building due to an unrepaired leak in the roof, I could see first hand the terrible effect it would have on the neighborhood. I am also a Certified Public Accountant so I decided to take a look at their financial statements to see why they had been too broke to fix the roof.

All non-profit organizations have to file an informational tax return called Form 990 with the Internal Revenue Service. All of the information in this article is from tax forms filed by the PPL, which are open to public inspection, and which are available on the Internet at www.fndcenter.org.

For the most recent year posted, June 30, 2004, the PPL had an excess of revenue over expenses (called profit in the business world) of over $2.6 million. For an institution with an annual budget of around $10 million, this is not an indication of financial crisis-quite the contrary. But since a single year could be misleading, I also looked at the tax returns for the two previous years. Those two years also showed "profits" of $710,000 and $459,000. But the PPL claims there is a crisis so I decided to look further.

Profit is only one measure of an agency's financial health. I also looked at the Balance Sheet of the PPL. The Balance Sheet shows what an organization owns (such as cash, investments, buildings, computers, books) and what is owes (unpaid bills and loans). The difference is called net assets for non-profits, retained earnings for corporations, and net worth for individuals. The library had net assets totaling $57 million.

The tax return indicates that PPL has investments totaling $34 million dollars. Around $14 million of this amount is the library's endowment. Endowments are restricted by donors so that only the earnings can be spent. This restriction has the force of law. In addition, RI state law requires that a percentage of earning be retained to cover inflation-a sort of 'cost of living' adjustment for endowments.

The additional $20 million is unspent income from previous years and constitutes the library's savings. As such, it could be used for any purpose including fixing the leaking roof at the Washington Park Branch. Unfortunately, the Board of Directors has decided to designate this money to be used as if it were an endowment-that is, they decided to spend some of the investment earnings but not the funds themselves. This decision has no legal force; the Board can change this decision and use these funds at any time. The Board has stated that not spending this $20 million in savings is necessary to ensure the future of the library.

I am a great believer in fiscal responsibility. I think saving money for the future is a great idea. But they are times when you have to dig into your savings account-if your kids are sick, or your roof is leaking, or you're thinking of closing two thirds of your branches. The PPL could make all the needed repairs to all the branches without using their endowment and still have savings.

The financial statements indicate that the library was in sound financial health when the Board decided to forgo needed repairs and close the Washington Park Branch. Now they're threatening to close almost two thirds of the branch libraries. What do their budgets say about their future financial health?

The PPL administration is claiming that it will have a $900,000 deficit in its June 30, 2007 budget. When I looked at this budget I was surprised to see that projected income was around $8.5 million for the years ending June 30, 2006 and 2007. The average income for the last five years was $10.5 million. What happened to the other two million? City funding has remained steady and State funding has increased. I then realized that the budget shows no income from the annual fundraising campaign. Where was all the fundraising income?

The answer is complicated. In August the PPL incorporated a new non-profit organization called the Providence Public Library Foundation. One reason for doing this is that the foundation will not be required to comply with the Open Meeting laws. All annual campaign donations will go through this foundation and the Board of Directors of the foundation, not the library Board, will decide (in secret meetings) how much of the library's money to forward to the library. The only way to find out how much money was donated to the foundation is to wait until their tax return is filed. By setting up the foundation the library manages to hide millions of dollars of their money from public scrutiny and make themselves look much poorer than they are.

I love libraries. I think that libraries should be making it easier, not harder, for people to read books. It makes me very sad to request that the City withhold funds from the library until an investigation is completed into PPL and a commitment is made by the library to follow its Mission Statement and support the branch libraries in our community. At the very least, the City has to right to insist that the funds that it gives to the library be used to save the branch libraries in our poorest neighborhoods.

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i think it's pretty sad that they're closing down so many of the neighborhood branches. i know the one in smith hill gets a lot of traffic and would be a great loss to the neighborhood.

yeah... I saw a few kids with their mom reading the "closed" sign on the o'ville square branch and looking confused. sucky, sucky.

I thought the PPL was in deep financial trouble, but this letter seems to say otherwise. that's pretty upsetting.

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The library closings are an absolute outrage and really pretty disgusting on many different levels. We should be building more libraries, not closing them down. The Knight Memorial Library on Elmwood Avenue is an ESSENTIAL resource for hundreds of children who spend some of their after-school hours there, as well as the only computer access for countless neighborhood residents.

It really makes me pretty ill, and down on Providence, thats for sure...

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I was recently reading about a city that sold off it's school buildings and built all new buildings, I wish I could remember where I was reading and what city it was. Anyway, they basically replaced their schools at very minimal, almost no, cost due to the great value of the properties that their old, dilapidated schools were located on. Imagine if Providence could sell off schools like Hope High to build new state of the art facilities with attached Public Libraries. Hope would probably catch a good chunk of money and would likely be eliglible for historic tax credits if the building were reused, making it attractive to developers to purchase for a premium.

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I was recently reading about a city that sold off it's school buildings and built all new buildings, I wish I could remember where I was reading and what city it was. Anyway, they basically replaced their schools at very minimal, almost no, cost due to the great value of the properties that their old, dilapidated schools were located on. Image if Providence could sell off schools like Hope High to build new state of the art facilities with attached Public Libraries. Hope would probably catch a good chunk of money and would likely be eliglible for historic tax credits if the building were reused, making it attractive to developers to purchase for a premium.

that brings up the issue of where the new schools would be built. does the city have land that it could use or cheaply purchase for schools?

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that brings up the issue of where the new schools would be built. does the city have land that it could use or cheaply purchase for schools?

The city has NIMBYs that would complain about any new school. <_<

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Is your Library System run by City Hall. If so, this is outrageous. You need to complain to the Mayor. This would never fly in Hartford. The Mayor would be the target of a political firestorm.

i believe it's run by a non-profit organization that's subsidized in part by the city, but i could be wrong. i do believe most of their funding comes from donations and fundraisers.

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i believe it's run by a non-profit organization that's subsidized in part by the city, but i could be wrong. i do believe most of their funding comes from donations and fundraisers.

Yes, the Providence Public Library is its own non-profit organization. The city contributes money but it doesn't run it. What's being examined now is whether the City should take over the branches or whether the Library should do it (with increased city funding). In the former case, it would be like in NYC where the main research library on 5th Ave. is run by a private foundation and the branches are run by the city.

In any case, the leadership of PPL seems to be doing miserable job and is also (it turns out) grossly overpaid.

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The idea of selling off the old buildings and constructing new libraries with modern amenities such as public computers with high speed internet is great, in theory. It can only be done with a motivated push from special interests, and we don't have that for the libraries. The teachers unions have just destroyed the public schools in our state, and I don't see any end to the decline in sight. Its sad but the libraries are going right down with the schools. I think that both have failed to change with the times. I remember writing book reports by hand, but by the time I was a senior in high school, we were composing our work using computer word processors. Yet, in 1999 my public high school only had one internet-ready PC and the libraries still had card catalogs and 386s running Windows 3.0. That opened my eyes to the problem. This issue is a tough one.

I have seen the signs in O Square which read "Olneyville needs a library, not luxury lofts." I think the PPL needs a strategy. There is an apartment complex near my house called Carleton Court, which appears to be a former elementary school. It can be done, but will NIMBYism win out over education?

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i believe it's run by a non-profit organization that's subsidized in part by the city, but i could be wrong. i do believe most of their funding comes from donations and fundraisers.

I always figured all municipal public libraries were city run. Go figure. I hope you guys figure out a way to save the branches. I've worked at 2 in Hartford over the years and they are certainly an asset to the community.

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Providence library faces a crossroads. Tensions are rising over a growing deficit and the possibility that some branches in the neighborhoods could close. [ProJo.com]

Audit of library to ask whether finances are 'as dire as it sounds?' Neil D. Steinberg, former chairman and CEO of Fleet Bank Rhode Island and vice president for development at Brown University, has been asked by the mayor to examine the operation. [ProJo.com]

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the only land the city has is either under schools currently, or full of contamination. or Roger Williams Park.

I don't know where Providence could build new schools, though it's a question the city will probably need to address at some point. But as far as libraries go, Fleet Bank donated the space for RISDs new library (in a building which RISD eventually purchased, don't know how that all worked out). If we had a better business climate, there may be more corporations out there that could make big donations like this.

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I don't know where Providence could build new schools, though it's a question the city will probably need to address at some point. But as far as libraries go, Fleet Bank donated the space for RISDs new library (in a building which RISD eventually purchased, don't know how that all worked out). If we had a better business climate, there may be more corporations out there that could make big donations like this.

would this be allowed? RISD is a private institution, providence public schools are not. the only way i see something like this happening is if the corporation gets a HUGE tax break from the city.

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I'm talking about the libraries, not the schools The libraries are quasi-independent.

ah... that makes more sense... it'd be a big fat deduction for the corporation if they donated land or money so the library could stay open. maybe we could get textron or gtech to sponsor a branch... the gtech olneyville library. :P

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  • 1 month later...

Well, I agree the system certainly doesn't work.

No matter what method is done to solve the problems, it is imperitive to save the neighborhood branches...

OK, please forgive my ignorance on this subject. How difficult would it be to have the city take over the PPL and what reasons are there against it? Our library system is actually great and expanding services at most branches and is undergoing a dramatic face lift at our main branch downtown, this is all part of the city's redevelopment plan and is run from the mayor's office. It just seems like it could provide some added stability to such a vital resource to have the city take over and ensure a certain level of service for the residents of PVD and beyond.

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OK, please forgive my ignorance on this subject. How difficult would it be to have the city take over the PPL and what reasons are there against it? Our library system is actually great and expanding services at most branches and is undergoing a dramatic face lift at our main branch downtown, this is all part of the city's redevelopment plan and is run from the mayor's office. It just seems like it could provide some added stability to such a vital resource to have the city take over and ensure a certain level of service for the residents of PVD and beyond.

Well, the private corporation that runs the library doesn't want to relinquish control. That's why the city is cutting funds. Without say on the baord of directors, the city wants no further involvement. It's pig-headed of both parties involved. What makes you so certain the city would run it better anyway? They do such a 'stellar' job of running the school system - (one of the lowest graduation rates in the USA).

What people may not realize is that, for some reason the downtown location is actually two branches - the downtown and empire branch. So that only leaves two others operating - Rochambeau and Mt Pleasant according to the most recent plan. It's very sad that some of the other neighboorhoods will not have access to the local programs and services they so desparately need.

- Sean

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Well, the private corporation that runs the library doesn't want to relinquish control. That's why the city is cutting funds. Without say on the baord of directors, the city wants no further involvement. It's pig-headed of both parties involved. What makes you so certain the city would run it better anyway? They do such a 'stellar' job of running the school system - (one of the lowest graduation rates in the USA).

What people may not realize is that, for some reason the downtown location is actually two branches - the downtown and empire branch. So that only leaves two others operating - Rochambeau and Mt Pleasant according to the most recent plan. It's very sad that some of the other neighboorhoods will not have access to the local programs and services they so desparately need.

- Sean

Of course I'm not sure that the city would do a better job, it's just that in my experience our library is one of our best run city departments. Everything else is a mess like the schools and the PD. However our Library is undergoing a fairly ambitious expansion at the Main Branch Downtown and has been renovating most neighborhood branches in recent years. There have been no talks of closing any branches or cutting any services in my lifetime that I can recall.

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