Kokomo-Howard County Public Library salaries continue to climb despite cutbacks

scott.smith@kokomotribune.com

Kokomo-Howard County Public Library board members voted this week to cut hours and charge checkout fees, in response to a big property tax shortfall.

But the shock of a half-million dollar hit to the budget did more than simply prompt a round of short-term revenue balancing maneuvers - it also has the potential to permanently change the way the library board does business.

Five years ago, the library board could have simply trimmed one line and solved the problem - with no cuts to services and no checkout fees.

But a combination of hefty employee pay increases and property tax reform has removed the cushion from the library's budget.

No longer can the library count on having hundreds of thousands each year to sock away into a reserve building fund.

Each year for the past six years, the amount of savings set aside has dwindled.

And each of those years, library employees received raises.

Between 2003 and 2008, the total amount spent on employee pay and benefits increased 28 percent.

During the same period, the amount saved each year for future capital expenses dwindled, from $1.2 million in 2003 to less than $150,000 this year.

More telling, the library's 2009 budget was almost exactly the same as the library's 2003 budget.

But in 2009, salaries and benefits made up 63 percent of the budget. In 2003, that figure was 48 percent.

And almost all of the increase came in the form of pay increases, as opposed to, for example, the city of Kokomo, where insurance costs have largely driven the increase in personnel expenses.

Library director Charles Joray was the biggest recipient of the taxpayers' largesse, with his salary increasing 41 percent over that time period.

In 2003, Joray's salary was $70,242; this year, prior to the cost-cutting moves, Joray was scheduled to earn $98,262.

Joray is now the 12th highest-paid library director in the state, in charge of the 18th largest library population served.

Both Joray and library board president Susan Luttrell said earlier this week they expect a pay freeze for 2010, and to require increased insurance premium contributions from employees.

But the library board is also getting ready to spend almost all of the $4.9 million it has in reserves on the Main Library renovation and a new Outreach Building.

Like all of the library's previous building projects, the board wants to complete the renovation and Outreach Building without borrowing any money.

The board members believe they have the money to build without borrowing.

But the completion of the renovation will also complete the close of an era of stress-free library budgeting.

Next year, the library may not have any money to set aside for reserves, given current personnel costs and expectations of a further erosion in the tax base.

Board members said Monday they'd review all of the cost-cutting measures to decide whether they'll be continued beyond 2009.

One thing Luttrell said won't continue is a pay-raise system installed back in 2005, which resulted in Joray receiving a $14,000 salary increase in 2006.

Upon the recommendation of Joray and the board's salary committee, the board hired a pay consultant to create what board members hoped would be a more equitable pay scale.

The consultant recommended basing Joray's pay on what other directors of similar-sized libraries make, and the 2005 library board agreed.

That board also agreed to assign each library employee to a "step" in a pay hierarchy.

According to the adopted pay system, any employee who had worked at least six months of the year and had received a good review would jump up one step.

Joray said that last year, for instance, about 80 of the library's 90 employees increased one step. That resulted in an average 2.5 percent pay raise.

The board did not, however, follow the consultant's recommendation to review the competitiveness of Joray's pay (and certain top library employees) every three years.

That review (which resulted in the $14,000 pay bump in 2006) was due in 2008.

Luttrell said she didn't see the raises - which for most employees ranged between 3 and 6 percent per year - as exorbitant, but said employees are aware benefits will be cut next year.

"Last year, we had to throw the step system out the window, given our financial bind," she said.

As for the constant increase in the percent of the budget consumed by pay, Luttrell said that wasn't unusual for public agencies.

"It's something that will be addressed in the 2010 budget," she said.