Tuesday, August 13, 2002

Library skeptical about loan proposal




By Gregory Korte gkorte@enquirer.com
The Cincinnati Enquirer

        Hamilton County Commissioner John Dowlin says his proposal to allow the Public Library of Cincinnati and Hamilton County to borrow money interest-free could save the five neighborhood branches targeted for closing. But library officials, historically reluctant to incur debt, seem skeptical that the plan would do more than paper over the library's funding crisis.

        “Do we place the burden of financing our system today on the citizens of tomorrow? I'd have to think long and hard. My initial reaction would be very negative,” said Charles Lindberg, finance chairman of the library's Board of Trustees.

        Mr. Dowlin's proposal, to be presented to the library board today, would allow the library to borrow money on the county's credit for the construction of the St. Bernard branch library. That would free up $3.1 million in cash - the amount of the state budget shortfall discovered in June.

        The county would even be willing to bear the interest and closing costs, estimated at $70,000 a year, until the library's state allocation gets back to its 2000 level of $52.8 million. Its 2002 allocation is $48.3 million, with the drop due to a decline in state earnings tax receipts.

        Mr. Dowlin compared the arrangement to a “No down payment, no interest for a year” car loan. The quid pro quo: The library board must agree to keep open the five branches threatened by the budget shortfall: Bond Hill, Elmwood Place, Deer Park, Greenhills and Mount Healthy.

        It's a great deal, Mr. Lindberg said. But he said it postpones the inevitable.

        “It's a wonderful financing arrangement in that sense. But someday the piper has to be paid,” Mr. Lindberg said. “It's a good thing we didn't do this 10 years ago, because then we'd be worried about how to manage our debt load.”

        Even Mr. Dowlin concedes that his plan is only a “short-term fix,” which would buy the library more time to consider other cost cutting - or revenue enhancing - measures. Although county officials are loath to propose a property tax levy, Cincinnati is the only major library in the state without local tax support. It's also one of the few government agencies anywhere without any

        Mr. Lindberg said. But he said it postpones the inevitable.

        “It's a wonderful financing arrangement in that sense. But someday the piper has to be paid,” Mr. Lindberg said. “It's a good thing we didn't do this 10 years ago, because then we'd be worried about how to manage our debt load.”

        Even Mr. Dowlin concedes that his plan is only a “short-term fix,” which would buy the library more time to consider other cost cutting - or revenue enhancing - measures. Although county officials are loath to propose a property tax levy, Cincinnati is the only major library in the state without local tax support. It's also one of the few government agencies anywhere without any debt..

       



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