Now that Menlo Park has accepted John Arrillaga's offer to pay for all but the first $20 million of the cost to build a new main library, how will the city come up with its share?
After pondering that question Tuesday (Aug. 8), the city's Finance and Audit Committee came up with suggestions, but also said more information and public input is needed.
The suggestions were wide-ranging: from selling city assets such as its water company, to issuing bonds for enough to also finance other upcoming projects. The committee also recommended looking at establishing a line of credit that could allow the city to spend some of its reserves on the library with the line of credit providing funds in the case of an emergency until the reserves were built back up.
But committee members said much of the information needed to make an informed decision is missing. "We would like to make sure that there's a little more information available for the public," said committee chair Anne Craib, who also called for "a more robust public comment period around this."
Just what the city's total expected contribution would be isn't clear, committee members said, questioning if the city will have to pay "soft costs" for environmental studies and design, or the costs of furnishing the new building and purchasing new books, on top of the $20 million.
Councilman Peter Ohtaki, who is on the Finance and Audit Committee, said he thinks the city should use the $4.5 million of its reserves that aren't assigned to any specific use for the library, and might think about capping some of its other reserve funds at current levels, freeing up more funds for the project.
If the city decides to borrow part of the $20 million, committee members recommended it do so by issuing a 30-year fixed-rate bond.
Administrative Services Director Nick Pegueros suggested ways the city could increase revenues to pay off bonds, including increasing its utility users tax, hotel tax or business license fees, or asking voters to approve a parcel tax or general obligation bond.
But Mr. Ohtaki said he wanted the city to first "make sure we're sharpening our pencil on our forecast" of expected income, including tax revenues from new hotels coming on line and increases in property tax revenues.
One item the committee did suggest be looked at is the cap on the utility users' tax that limits payments by any one user to $12,000 a year. Committee members wanted to know how many businesses are affected by the cap.
The city now charges a 1 percent tax on gas, water, electric, cable, telephone and wireless bills, but voters approved a tax of up to 3.5 percent on gas, water and electric bills and up to 2.5 percent on cable, telephone and wireless bills. If the maximum amount were charged, annual revenues from the taxes could rise to a total of $3.86 million a year, up from the current $1.26 million, a report from Mr. Pegueros says.
Mr. Arrillaga's offer to pay for all but the first $20 million of the cost of a new main library in Menlo Park took the city by surprise when it was made in July.
At a March study session, council members had heard the results of a space needs study that recommended the library's size be increased from 33,000 square feet to 44,000 square feet, at a cost of at least $32 million. Council members asked the city to first look at how to increase library services in the Belle Haven neighborhood, before expanding the main library.
But Mr. Arrillaga, according to city officials, wants his donation to go specifically to the main library and wants the project to move forward quickly.
On July 18, the council voted to accept Mr. Arrillaga's offer, directing staff members to come back in August with: a plan for the project, ideas on how to change city work plan priorities to free up resources for the library, plus ideas from the Finance and Audit Committee on how to come up with $20 million.