City of Grant, Nebraska

Letter to the Residents - Regarding Library Funding

To the Residents of the Community,

The City would like to address recent discussions regarding the proposed adjustment to the library budget and provide additional context regarding the financial considerations behind this decision.

First and foremost, the City recognizes and values the important role the public library plays within our community. The library provides educational resources, internet access, children’s programming, research opportunities, community engagement, and many other services that benefit residents of all ages. The City remains committed to ensuring the library continues to serve as an important community resource moving forward.

With that said, the City Council also has a responsibility to oversee the financial health of the entire municipality and ensure that all departments and public services are funded in a fair, sustainable, and responsible manner. The discussions currently taking place are not about eliminating the library or ending support for library services. Rather, they are about establishing a long-term funding structure that is financially sustainable for the City while balancing the needs of all departments and taxpayers.

It is important for the public to understand that this is not a new discussion. For approximately the past five years, the City Council has repeatedly encouraged the Library Board and Library Director to explore additional funding opportunities outside of continued increases in franchise fee support. During various Library Board meetings, the City suggested exploring options such as:

• A potential sales tax initiative
• Annual county user fees for non-city residents
• Modest fees for certain programs or services
• Expanded fundraising efforts
• Greater use of donations and foundation support

These suggestions were generally dismissed or not pursued further by the Library Board and Library Director.

At the same time, discussions were held regarding increasing electrical rates beyond what would reasonably be necessary for utility operations in order to generate additional franchise fee revenues. There were also discussions regarding increasing property taxes through the levy to further support the library. The City believes both of those approaches place additional financial burdens on residents and must be considered carefully and responsibly.

Over the last three fiscal years, the City has budgeted approximately $210,000 annually in franchise fee revenues to be distributed throughout City operations and services. During that same period, the library received significant and increasing support from those revenues:

• Fiscal Year 2023–2024: $126,963 transferred to library operations
• Fiscal Year 2024–2025: $139,798 transferred to library operations
• Fiscal Year 2025–2026: $148,257 transferred to library operations

In total, approximately $415,018 in franchise fee revenues has been directed toward library operations over the last three fiscal years.

Based on the annual franchise fee budget of $210,000, the percentage allocated to the library each year was:

This means the library’s share of franchise fee revenues increased from approximately 60% to over 70% in just three years.

While franchise fee revenues are a legitimate funding source, they are limited revenues intended to help support numerous City operations and services. As larger portions of these funds have been directed toward the library, other departments have experienced reduced funding levels or stagnant budgets despite increasing costs and operational demands.

During this same three-year period:

• Economic Development funding decreased by approximately $50,917
• Street Department funding decreased by approximately $23,868
• Parks & Recreation funding decreased by approximately $21,536
• Cemetery funding decreased by approximately $11,880

Meanwhile, the library budget increased by more than $22,000.

These facts do not diminish the value of the library or its services. However, they do demonstrate the financial imbalance that has developed over time. The City Council must evaluate all departments equally and ensure that one department does not become disproportionately dependent upon funding sources that other essential services and community amenities also rely upon.

The City also conducted comparisons with similarly sized Nebraska communities to better understand how libraries are commonly funded and operated across the state. Several consistent trends emerged from those comparisons:

• Most comparable communities primarily fund their libraries through the dedicated levy authority allowed under Nebraska Revised Statute 51-201
• Additional support commonly comes from grants, donations, fundraising efforts, and library foundations
• Most communities do not heavily rely upon utility franchise fees to support library operations
• Many comparable communities operate with smaller overall budgets while maintaining similar or greater public service hours

One example identified during this review involved staffing efficiency and public access hours. Currently, the Library Board is approving approximately 92 hours of paid staffing time per week while the library is open to the public approximately 35.5 hours weekly. Comparable communities in some cases operate with similar staffing levels while maintaining more public service hours and lower overall operating costs.

Under Nebraska law, libraries may request up to 10.5 cents per $100 of taxable valuation through a dedicated library levy. Based on current property valuations, that levy would generate approximately $99,910 annually for library operations within our community.

The City’s decision to continue supporting the library through this dedicated and transparent funding structure, which closely aligns with how many similarly sized Nebraska communities fund their libraries. This proposed funding level also aligns closely with the  audit benchmarks and per-capita spending averages among comparable municipalities.

Additionally, funding the library through a dedicated levy creates a more stable and sustainable long-term funding model. As property valuations increase over time, library funding generated through the levy would naturally increase as well.

The City must also consider growing financial uncertainty facing municipalities throughout Nebraska. Recent legislative changes and ongoing discussions at the state level include:

• Reductions in municipal equalization aid under Nebraska LB1072
• Potential future levy limitations
• Proposed property tax growth restrictions
• Rising infrastructure and operational costs affecting all departments

Current estimates suggest the City could lose between 5% and 10% of its state equalization funding in the coming fiscal year. Future legislation could create even greater challenges for municipalities attempting to maintain essential public services.

Given these realities, the City must begin planning now for long-term financial sustainability across all operations. Continuing to increase reliance on franchise fee transfers for one department while other departments absorb reductions is not financially sustainable.

It is also important to note that the proposed adjustment does not prevent the library from pursuing additional support opportunities commonly utilized in other Nebraska communities, including:

• Grants
• Donations
• Community fundraising efforts
• Partnerships and interlocal agreements with other taxing entities such as schools, hospitals, or the county
• Library foundation support
• Modest fee-based services where appropriate

Many Nebraska libraries successfully supplement public funding through these additional revenue sources while continuing to provide quality services to residents.

The City Council remains committed to working cooperatively with the Library Board, Library Director, staff, and community members to ensure the library continues serving residents effectively. At the same time, the Council must make difficult financial decisions that consider the needs of the entire community, including public safety, infrastructure, streets, parks, economic development, utilities, and other essential services.

The proposed budget adjustment reflects an effort to:

• Create greater financial balance among departments
• Reduce overreliance on franchise fee transfers
• Align library funding with common statewide practices
• Improve long-term financial sustainability
• Preserve flexibility for future municipal needs
• Protect taxpayers from unsustainable financial growth

These discussions are not easy, and the Council understands residents care deeply about the future of the library.

Sincerely,

Derek Brueggeman

City Superintendent