What Might a New Shutesbury Library Cost?

Many questions and concerns are swirling around the idea of a new library for Shutesbury. How big will it be? What will it cost? With the Small Library Pilot Project in full swing and the M.N. Spear Library Trustees planning to submit a Building Program later this month, these questions are more pressing than ever.

In comments made at meetings on August 3, 2021, with Shutesbury Town Officials and August 17 with Shutesbury residents, Massachusetts Board of Library Commissioners (MBLC) Building Specialists Lauren Stara and Andrea Bunker noted that Shutesbury taxpayers will be asked to vote on funding the construction of a library before we have an actual building design. A recent NextDoor thread discussed this issue and a Library Trustee Co-Chair weighed in with some helpful information.

Though she did not have a square foot estimate or a cost per square foot estimate, she did note that the Trustees’ best assessment is that the MBLC will pay 64% of all currently unknown costs, eligible and non-eligible. Voters at next year’s Town Meeting will be presented with a “not to exceed” amount, though she didn’t know what that would be.

As to when taxpayers might expect a “robust” estimate for the project, this Trustee stated that Library officials hope to deliver that information “a month or so before Town Meeting.”

Deciding that next spring is too long to wait for such important information, I gathered information from various public sources, did some math, and came up with three “estimates” of what various sized libraries might cost the citizens of Shutesbury.

Disclaimer: The following information is for educational and entertainment purposes only—though I will be interested to see how close any of these estimates come to the one the Trustees and the MBLC eventually offer.

Without further ado...three cost estimates in order of ascending building size—and cost.

Formulas and figures used:

 

I will be using a per-square-foot cost of $729 based upon the recently completed Erving Library project:

 

 

$4,933,007 project cost as of January 2018 + $550,000 added June 2019 by Erving voters because of increased costs and plugging those numbers into the Bureau of Labor Statistics Inflation Calculator for September 2021 dollar values:

 

$4,933,007 increases to $5,459,271

 

$550,000 increases to $589,008

 

Erving library project cost adjusted for inflation: $6,048,279

 

$6,048,279 /8,294 s.f. = 729.2 rounded to $729.00 cost per square foot

 

Shutesbury’s share = 36% of total project cost

Funds available today =   $520,326 ($252,700 pre-paid by taxpayers via an annual $25,000 budget line item + $267,626 fundraising)

 

An interest rate of 2.5% over 20 years for any borrowed funds

Estimate #1: A Library Sized for Shutesbury’s Population Today: 3,434 S.F.

Shutesbury’s Master Plan Executive Summary, circa 2005, speaks to a library sized to the town’s population, noting the town’s 2000 U.S. Census population as 1,810 which would require a library with “a minimum of 3,600 square feet”.

Taking Shutesbury’s most recent U.S. Census data on population, 1717, I adjusted the square footage to reflect this decline in population.

3,600/1810 = 1.988 or 2 square feet per person

 

1717 * 2 = 3,434 square feet

Next, I applied the per-square-foot cost to build Erving’s new library:

 

3,434 * $729 =  $2,503,386 total project cost

 

Shutesbury’s share :

 

 $2,503,386 * 36% = $901,219 - $520,326 = $380,893

 

20-year loan for $380,893 at 2.5% interest = $24,433 annual payment

 

Total interest over the life of the loan: $107,771

Plugging $24,433 into our trusty Cent$ible Tax Calculator shows an increase of $0.11 on the tax rate and an annual increase of $27.08 for the next 20 years on the tax bill of the average home valued at $250,434.

Note: The tax rate used for the Cent$ible Tax Calculator is the fiscal year 2021 rate of $22.61. The tax rate for FY 2022, scheduled to be set in a few weeks, will be $23.37.

Estimate #2: The Expanded Library Plan of 2001: 4,000 S.F.

In 2001, the Library Trustees proposed a renovation/expansion project which would have added 3,100 s.f. to the existing library, creating 4,000 s.f. of usable space. This design was based upon a future town population of 2,392 in 2020 and 2,490 in 2027.

This plan never got off the ground because of protests regarding the design’s impingement on the Town Common. As described in the MN Spear Memorial Library Building Program July 2009 document on page 4, “The Committee chose to maintain good relations between the residents and the library rather than divide the town over the location of the library.” If the project was reproduced today and we assume that the renovation costs to the original library building equaled the square foot cost of the new construction, the estimate would look something like this:

4,000 * $729 =  $2,916,000 total project cost

 

Shutesbury’s share:

 

 $2,916,000 * 36% = $1,049,760 - $520,326 = $529,434

 

20-year bond for $529,434 at 2.5% interest = $33,962 annual payment

 

Total interest over the life of the loan: $149,799

The annual payment of $33,962 will increase the tax rate by $0.15 and add an annual increase of $37.64 to the average single-family tax bill for the next 20 years.

Estimate #3: The 2011 New Library Design: 5,800 S.F.

Those who lived in Shutesbury in 2010-2011 may remember that the library project ended with the Friends of the Library taking the Town of Shutesbury to court. For estimating purposes, I will recycle Shutesbury’s new building design from 2011: 

5,800 s.f. Library x $729 = $4,228,200 * 36% = $1,522,152 - $520,326 = $1,001,826

 

20-year bond for $1,001,826 at 2.5% interest = $64,804 annual payment

 

Total interest = $283,459

An annual payment of $64,264 will add $0.28 to the tax rate and increase the average single-family tax bill by $71.21 per year for the next 20 years.

Costs At-A-Glance

Other Library-Related Expenses to Consider 

Price increases and/or cost overruns may increase the actual cost of a new library. Erving, for example, appropriated an additional $550,000 to its committed amount of $2,210,380 due to a “higher than anticipated cost of construction”. In addition, its budget for furniture and equipment was eliminated.

Although Erving saved $100,000 on its solar array re-bid and expected another $100,000 grant upon its receiving certification in Leadership in Energy & Environment Design (LEED), increases in project costs prevented the town from shaving $200,000 from its share of the build.  

As I followed the construction process through the minutes of Erving’s Board of Selectmen, I identified at least 30 “proposed change orders (PCOs)” that changed various facets of the project. Though PCOs can add or subtract from the estimated project cost, I saw only one that was a deletion—and that was only to replace an original amount with a new, much higher one. 

The Erving library project manager noted that PCOs are usually paid by the town, even when they stem from errors and oversights made by the architects. The standard is 5% of total project cost; for Erving, that would come to approximately $250,000.

Of the PCOs I was able to identify, the total came to $151,160. The amounts varied from several hundred to tens of thousands of dollars.

The annual operating budget for a new Shutesbury library will be larger than it is now. As noted in a previous post, Erving’s budget exploded from $66,004 in fiscal year 2017 to a fiscal year 2022 budget request of $175,549. The town’s insurance costs were also increased to cover the new building and its contents. Higher costs associated with a new municipal building will become a permanent budget increase, putting permanent upward pressure on the tax rate. If Shutesbury’s Library budget increases by the same percentage, we may be paying an additional $110,850 by fiscal year 2027—or a total of $174,628. At today’s tax rate, that would permanently add another $.49 to the tax rate and another $122.84 each year to the average single-family tax bill.

Supply-chain challenges continue to haunt the building industry, inflating costs. 

No one yet has an inkling of how large a new library might be, but the MBLC’s Ms. Stara has encouraged Shutesbury residents to “think big”. As taxpayers, we need to decide if we want that catchphrase to apply to our tax bills, as well.

Do you want to know what these extra costs will do to your real estate tax bill? Use the handy Cent$ible Tax Calculator to find out.

Weekly Factoid:

 

From $2.6 billion to $14.5 billion to more than $24 billion: The legacy of “The Big Dig”.

 

Sources: The Big Dig: Learning from a Mega Project

 

True cost of Big Dig exceeds $24 billion with interest, officials determine

 

 The Big Dig: Learning from a Mega Project

Who will Win the “New Library” Contest—Shutesbury or Otis?

The Massachusetts Board of Library Commissioners (MBLC) will decide in early 2022 which town will receive the Small Library Pilot Project grant covering 75% of the eligible costs to construct a new library. Of the original four applicants, Chester and Florida have dropped out, leaving only Shutesbury and Otis as contenders.

How will the MBLC decide which town is most deserving? The Pilot Project Program Notice hints about the Selection Procedure, outlining the review panel that will study the worthiness of the applicants and recommend the winner to the MBLC Director. It is not a complete picture, however, since the document states that “A site visit and in-depth interview will be part of the review process”, indicating a more rigorous investigation than is described.

The panel has other metrics to consider, such as financial barometers and community needs. The list of six indicators is apparently not exhaustive, being introduced by the phrase, “The criteria for review and ranking will include”—again inferring that there is more to the list than meets the eye.

Trying to guess the victor is difficult, considering the dearth of information available. One thing seems certain: The decision will be made subjectively, not objectively.

Since I can’t resist prognosticating, I delved into some facts and figures in an effort to predict the winner. Here’s what I came up with, taking one criterion at a time.

1. Community need as determined by the current facility and its inadequacy to meet the community’s library service needs. Deferred maintenance must not be the primary reason for inadequacy.

In addition to a lack of water and septic to M.N. Spear and potable water to the Otis Library and Museum, both towns blame current space restrictions as the reason for a new library. Shutesbury’s MN Spear Library is only 768 or 900 square feet, (depending upon which library document is used as a source) and the Otis Library and Museum is 1,200 square feet (Note: the square footage for the Otis library listed on the MBLC Library Statistics page for 2018 is incorrect; I obtained the correct building size by calling the Otis Library Director).

In 2018 Shutesbury became number two in total circulation in the small library category (town population fewer than 2,000) in spite of our small building. Otis is further down the list, at number 14. This is a great achievement and shows that its small size has not prevented the MN Spear Memorial Library from serving the public’s needs.

2. Community Need Factor as calculated using DOR’s 2022 data for EQV and income per capita.

Comparing equalized values (the total value of all assessed property in town) for both towns, we see that Otis has a whopping $659 million compared to Shutesbury’s $244 million for 2020. Assumedly, the gap will be just as wide for the year 2022.

Otis beats Shutesbury regarding income per capita, as well: $35,153 vs. $28,862 for 2022.

Based on these two measures, Shutesbury appears to be the neediest.

3. Demonstrated community readiness and support for a major capital project.

This metric is unclear. Does “community readiness” reflect the information collected from the other criteria? Or is it a measure of something else? If it is the former, it seems redundant to include it as a separate category; if it is the latter, it is a useless measure unless it is made more clear.

“Community support” is equally vague: do they mean financial (which would be answered via other criteria on the list) or a general enthusiasm? 

Except for the select few Shutesburians with which they have consistent contact, the Commissioners might find zeal for this project wanting. As an example, note the 100 or so persons assembled at the videoed August 17 informational meeting. Assuming 75 of the attendees were pro-project, that number reflects only 5.2% of the registered voters in Shutesbury. Also, this number was achieved only after each Trustee contacted “a few people” to request they attend in an effort to achieve “a large turnout”.

4. Availability of a suitable site.

I found no information pertaining to Otis’ optimal site for a new library. For Shutesbury, the choice seems to be Lot O-32.  In mid-September, soil and groundwater samples were taken and sent for testing; so far no results have been announced.

5. Town/library willingness to work closely with the MBLC in the programming and design of the library.

Since this is a requirement, no doubt both towns plan to comply.

6. Financial stability of the municipality, its bonding capacity, and any financial reserves.

While both towns are financially stable, Otis has several advantages over Shutesbury.

Since 2017, Otis has been feeding its Stabilization fund with cash, raising its rainy day fund from about $847,000 in 2017 to a robust $1.3 million in 2021. Shutesbury had approximately $1.04 million in its Stabilization account in the years 2017 and 2018, but reserves fell in the next two years. In 2021 Shutesbury had about $711,000 available in its Stabilization fund.

When it comes to Free Cash, Shutesbury had slightly more in 2021 than did Otis—$1.4 million to Otis’ $1.2 million.

When it comes to overall wealth, Otis shines. The town has 1,536 single-family parcels compared to Shutesbury’s 748 and, since 2012, Otis has added 17 new parcels to the tax rolls while Shutesbury has lost 37. Single-family values in Otis total more than $501 million and Shutesbury’s stand at a little more than $187 million.

Otis’ average single-family values are higher than Shutesbury’s too: $326,575 to $250,434. Shutesbury’s average tax bill, at $5,662, is more than double that of Otis, which is a mere $2,766. Shutesbury residents face more of a struggle paying their tax bills, as well, using over 21% of their income to do so. Otis taxpayers spend only 8.35% of their income on property taxes.

Both towns have a single tax rate. For fiscal year 2021, Shutesbury’s rate was $22.61 ($23.37 for FY22). Otis’ fiscal year 2021 tax rate was $8.47, less than half of Shutesbury’s.

Checking the FY2020 Municipal Debt spreadsheet online, I found Otis carries no debt, compared to Shutesbury’s modest $232,000. The Division of Local Services notes that Otis has a Standard & Poor’s bond rating of AA, but does not report any rating for Shutesbury (though several other municipalities are missing this information, as well).

Conclusions

Predicting a winner is nearly impossible based upon the above criteria, some of which seem to be at odds with others. 

The concept of “need” is particularly confusing. If the predominant factor is income and equalized values, Shutesbury wins hands-down. Assumedly, this criterion is meant to give state aid to the less wealthy small towns. 

But this seems to contradict the last criterion, which appears to give weight to towns with large cash reserves and the ability to take on debt. For Shutesbury, the propensity to tax so close to the limit of $25/$1000 of valuation set by Proposition 2 ½ implies little financial wiggle room for new expenditures or debt.

Also, the work put in by Shutesbury to whittle down its debt over the past 20 years may indicate a disinclination to again take on large amounts of debt. To learn more about Shutesbury’s debt history, see my post dated August 11, 2021 “Inside Shutesbury’s Cash Stockpile”.

On the other hand, Otis’ low tax rate, lack of debt, and a large pool of taxable properties may make it look more “stable” to the review board members making the ultimate recommendation. With selection guidelines this vague, it’s anybody’s guess.

Weekly Factoid:

 

The first public library in the U.S. was founded in 1790 in Franklin, Massachusetts. The initial collection of books available to lend to the public was donated by Benjamin Franklin, after whom the town was named.

 

Source: Town of Franklin, MA