Library Building Project

Library Building Project

Bond cost and debt service scenario used for planning purposes

Scenario provided by Northwest Municipal Advisors on 6/3/22, based upon comparable bonds priced at
4.09% plus 1% (i.e., totaling 5.09%) to estimate possible interest rate increases over the remainder of 2022.
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Five alternative debt service scenarios presented by NWMA on 6/3/22, including the chosen Scenario C.  Scenarios vary on assumed rate of assessed value increase, 2022-2042 and shape of debt service over the repayment interval

Construction Estimate Update – April 2022

660 Spring Street Library Construction Estimate

Library Building Project Budget Summary - April 2022

SJIL Building Project FAQs

  • An expansion into the parking lot is not an option as parking space is already inadequate.
  • The building does not have the strength capacity for the addition of a second floor. Another
    story would also require more parking by regulation, but parking is at maximum capacity
    and inadequate and unsafe as it is.
  • The current building was originally constructed as a restaurant that opened in the 1970s.
    • Purchased by the Library and opened in 1983
    • Underwent a major renovation in 1988
    • Expanded and remodeled facility opened in 1995
    • Additional renovation in 2005 to maximize usage of available space.
    • It’s now been 27 years since the last expansion, and we are bursting at the seams.
    • Since 2010, the population of San Juan Island has increased by 22.7%. Since 1995, the population of San Juan Island has increased by 50%.
  • Heavy and constant use since the last renovation in 2005 means that maintenance and
    repair costs will only continue to rise. These costs come out of the annual operating budget
    and could negatively affect funds available for services, collections, and staff.
  • Aging infrastructure limits our technical capacity to support all user and staff needs.
  • We are unable to provide sufficient work stations and outlets in quiet areas for individuals
    using computers—their own, or the Library’s.
  • There is inadequate space for children’s materials and activities, and for teen users.
  • There is no space for additional books and other materials. Offering something new means
    that something we currently offer has to be cut.
  • We cannot meet the demands for meeting room space for public meetings, nor to host all
    Library programs, many of which have to be held offsite.
  • There are no spaces for individuals or small groups to meet for quiet collaboration or privacy.
  • The Library is noisy due to the necessary proximity of public service areas to work, study, and
    reading spaces, and to there being no effective separation between children’s, teen, and
    adult areas.
  • Staff areas are crowded and inadequate to efficiently complete work assignments, process
    books and other media, and prepare programs for children, teens, and adults.
  • Parking is inadequate and often difficult to access safely.
  • Long term costs for maintenance of the current facility will only increase over time, and
    eventually code related changes will force renovations onto a facility that is not sized for the
    community anymore.
  • Costs to renovate the existing facility would, per square foot, be higher than would likely be
    palatable and would wed the Library to the current building limits, as the current site is
    already not compliant with fire code.
  • Increasing maintenance and repair costs for the aging building may have a substantial
    impact on the yearly operating budget which is limited by law to an annual growth of no
    more than 1%.
  • If more money is needed for upkeep of the building, less money is available for materials
    (books, DVDs, audiobooks, equipment, databases and other digital resources) and programs
    for children and adults.
  • Professional staff hours may need to be reduced, lessening productivity and activities
    necessary for public services such as interlibrary loan, the development, organization, and
    maintenance of the Library's collections of books and other media, cooperation with other
    community organizations and agencies, public services such as instruction and other
    assistance with new technologies, and open hours may need to be reduced, etc.
  • At today’s costs for construction materials and services, the new Library will be
    approximately 15,000 sq ft., around 50% bigger than the current facility.
  • But . . . in addition to a larger building, on the new site will be space for increased and much
    improved parking, plus outdoor green space to hold Library programs and activities, space
    for public enjoyment, and room to grow in the future.
  • An energy efficient, functional, user-friendly building designed to be a 21 st century Library
  • Minimal need for expensive building repairs and replacements, a concern both now and into
    the future for the current Library building
  • The technology infrastructure to support the growing demand for public availability of
    computer use support services
  • The ability to meet the evolving needs of a growing population with expanded services both
    traditional and innovative
  • Well-equipped large and small meeting spaces, a recognized community need
  • Ample, flexible spaces for children’s, teen’s, and adult materials and activities, considered by
    the community to be core Library services and severely restricted in the current building
  • Enough space for seating in quiet areas for reading and study (not now available in the
    Library or elsewhere in the community, and a need frequently expressed by users)
  • Adequate, safely accessible parking, an ongoing problem at the current facility
  • Outdoor spaces for Library programming and use; currently outdoor programming must be
    done off-site
  • New technologies and services
  • Ample staff workspace designed for efficiency and productivity
  • The new location is closer to the middle of town.
  • Students can easily walk from public and private schools.
  • The Mullis Senior Center and Village at the Harbor will be close by.
  • Being on the main road through town leads to easier access for more people.
  • Instead of 2/3 of an acre currently, the Library will have 2 ½ acres with space for activities,
    extra parking, and room for growth.
  • The total project is estimated to cost $20,000,000. An updated estimate by a construction
    management team lists construction costs at approximately $14,500,000, including FF&E. A
    2020 non-taxpayer bond for $2,075,000 to purchase the property will be retired.
    Architecture and construction management costs are estimated to fill the remainder of the
    budget amount.
  • The COVID pandemic and the resultant supply chain disruption, along with the current
    expected downstream effects of the Ukraine conflict, have served to increase prices
    dramatically over the past two years.
  • There have been significant increases to costs within categories that include metals,
    concrete, copper, and lumber.
  • Though the rate of increase may table off, it’s unlikely that costs will reverse themselves to
    previous levels.
  • If we wait, it’s only going to get more expensive.
  • In order to have funds for property acquisition, architectural services, construction,
    equipment and furnishings for the new Library facility, resources will be sought through:

    • A bond issue to fund 60% of the project that would be approved by the voters; for a bond
      to be passed, it is necessary that 40% of voters from the previous general election vote
      and that 60% of those individuals vote “yes” on the bond issue.
    • 40% are already being sought through grants from government and private entities that
      fund Library construction projects, plus contributions from community stakeholders and
      private donors. The Library’s application for a $2 million grant through the Department
      of Commerce’s Library Capital Improvement Project grant fund is already in process.
  • The regular tax levy funds the Library’s annual budget. This is an operating budget based on
    anticipated income primarily from a tax levy collected twice a year by the County. It does not
    include funding for large capital projects such as construction, site acquisition, etc. necessary
    for the creation of a new Library facility. By law, this budget may increase by no more than
    1% each year, not even keeping up with inflation. This would continue to be true in a new
    facility. The Library does not have a reserve fund dedicated to capital projects.
  • The proposition authorizes the Library to incur indebtedness through the issuance of up to
    $12,000,000 of general obligations bonds with a maximum term of 21 years.
  • The annual cost to a taxpayer owning a:
    • $500,000 home is approximately $88 per year.
    • $750,000 home is approximately $132 per year.
    • $1,000,000 home is approximately $176 per year.
  • Affordable housing and an expanded library serve the same island families in different ways.
    Limited income presents many challenges, and housing is an important one. But families also
    need youth programs in safe spaces when school isn’t in session, free access to technology
    and technology instruction (computers, wifi, hotspots, the internet), and a free space to hang
    out that’s just for fun. The library fills those needs with no cost of admission and is
    available 6 days a week.
  • At the same time, we’re excited to see affordable housing grow as the Town and County
    continue to design and implement plans to address that unique challenge. Our initiatives
    work beautifully together, just as the library works closely with our local schools, the family
    resource center, senior services, and many other partners in the community serving island
    families. The Library’s efforts make it more affordable for families to live here, and more
    space means we can offer more benefits.
  • Although the project has been getting cost estimates throughout the process of planning the
    new Library (e.g., during initial feasibility studies), the Library’s construction management
    firm (O’Connor Construction Management) performed a re-estimation of the construction in
    April of 2022.  This was essential in order to adjust estimates for recent inflation in labor cost
    and materials.
  • The total estimate of $20 million for the full project includes more than just building
    construction.  The total estimate includes:

    • Repayment of the short-term bond for acquiring the 660 Spring Street site
    • Architecture and engineering fees
    • Demolition of the existing building and preparation of the site for construction
    • Construction of the new building, parking areas and outdoor space
    • Construction management fees
    • Furnishings and fixtures for the interior of the building including shelving
  • Clearly, costs do shift and things change, especially on projects which take years to plan and
    complete.  The Library’s construction management firm included industry-standard cost
    escalators and a contingency buffer in the overall estimate, in order to generate the most
    responsible estimate possible.
  • Water leaks which occurred during the hard freeze of December 2021 did damage the
    existing building at 660 Spring Street.  The damage DOES NOT increase the cost of a new
    Library on the site for two reasons:

    • The existing building was always going to be removed from the site at the start of
      construction, so its condition is not relevant to the cost of constructing the new Library.
    • Insurance claims by the Library District have paid for all of the remediation work at 660
      Spring Street allowing us to render the existing building safe and secure.  Remediation
      has resulted in the removal of interior materials that were damaged in order to ensure
      that the existing building can be maintained until it is removed and new construction
      begins.
    • Furthermore, remediation allowed the safe removal of asbestos-laden materials from
      the existing building.  This removal is also covered by the insurance claims, and is likely
      to result in making the eventual demolition of the building safer and less expensive than
      otherwise.
  • In summary, the water leaks will have little to no negative effects on the overall project
    budget.
  • The overall plan is to fund the new Library project through a combination of private
    donations, grant opportunities, and public funding. In this case, the public funding will be in
    the form of a voter-approved bond, paid back over the course of twenty years.
  • These methods of raising the necessary funds work together, because private donors want to
    see a measure of public support before committing to a gift, and voters want to understand
    that private donors have interest in participating and that the whole project will not be paid
    for by taxes.
  • The Library District, with help from many in our community, has begun a private capital
    campaign, and our Friends of the Library organization has been gathering donations for
    several years.
  • As we complete the November election, the focus will shift to private fundraising, and to
    working with the State Legislature on our grant application for the Library Capital
    Improvements Program.
  • All three aspects of our fundraising plan come together in 2023 to yield the funds necessary
    to build the new Library at 660 Spring Street.

At the time the Library District placed Proposition No. 1 on the ballot (in May 2022), the board worked from an estimate that passage of the bond measure would result in an annual cost to taxpayers of $88/year for a $500K home, $132K/year for a $750K home, and $176/year for a $1 million home, over the 20 year lifetime of the bond repayment.  That estimate is available at https://www.sjlib.org/wp-content/uploads/2022/10/SJILibrary-Bond-Financing-Scenario.pdf

These estimates were created by Northwest Municipal Advisors, the Library District’s bond financial planners, based on available interest rates in May 2022, with an additional 1% to estimate further rises between May and the eventual sale of the bonds.  NWMA used actual bond transactions at the time and started with a rate of 4.09% and added 1% to form a conservative estimate for municipal bond interest rates.  Commercial or private lending rates are higher, and are not directly applicable.

The actual interest rate will be determined at the point where banks or investors make a proposal to purchase the bonds, after the election.  At the point where an agreement is reached between the Library District and a bank or investment firm to purchase the bonds, the interest rate will be known.  The Library District anticipates that this will occur shortly after the election, although the actual date will be determined by the response by banks to the Library’s request for proposals.