My Turn: Outsourcing library management a risky business
February 11, 2010
TRUCKEE, Calif. and#8212; The Nevada County Board of Supervisors is currently examining whether it should transfer the management of its library system, which has been operating in the red for several years, to a private contractor. I recently served on Nevada Countyand#8217;s Library Management Model Ad Hoc Committee, which had the task of reviewing four management options and recommending one or more of them to the County CEO. After spending many hours examining budgets and weighing the pros and cons of privatization, here is my perspective on the issue.
If a public library system is already poorly managed, then it might make sense to shift management to a private company that has a financial incentive to improve operations. In Nevada County, however, there are no signs of mismanagement. Library patrons seem satisfied with their libraries and#8212; and, in fact, are those who are fighting hardest to keep libraries under public management. Also, as indicated by a recently completed strategic plan, librarians intend to continue improving services.
The presumed benefits of private-sector management would therefore come through cutting costs, which fits with the boardand#8217;s goal of having its library system be fiscally self-sufficient. The private contractor under consideration by the Board would achieve these savings largely by slashing the benefits paid to library staff, by eliminating wage increases that might otherwise have occurred through the countyand#8217;s collective bargaining process, and, over time, by replacing higher-paid staff with lower-paid (less experienced or less well-educated) staff or by reducing staffing levels altogether.
If these actions were taken, would the countyand#8217;s libraries still provide the same level of services that residents now enjoy? Perhaps, but itand#8217;s unlikely. If the quality of library services relates directly to the number and quality of staff who provide library programs, then cutting the number and quality of staff can only harm library services. Consider, too, that the board, by hiring a private contractor, reduces its ability to ensure that county libraries truly meet the needs of the public.
The impact of reductions in library staff would be compounded by the imperative of a private contractor to make a profit, which means a portion of taxpayer revenue would no longer be available for books, programs, and other services. Itand#8217;s unknown whether the benefits of private management would outweigh this loss.
Given these risks, it would seem irresponsible to shift library management to a private contractor if the county is otherwise able to meet the needs of the public in a fiscally sustainable manner. And, indeed, the county can do so. The Friends of the Truckee Library, using the insights of library staff, developed an alternative budget that would maximize services while retaining a positive balance in the fund that finances the library system.
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County managers vetted the Friendsand#8217; budget and included it in the range of options that were examined by the Citizens Oversight Committee and the Library Management Model Ad Hoc Committee. After deliberation, both committees recommended the Friendsand#8217; option to the County CEO. (The ad-hoc committee also recommended a second public-management option.) No one on these committees advocated the option of hiring a private contractor. County supervisors are scheduled to choose their preferred option on Feb. 23.
The poor fiscal condition of the Nevada County library system is mostly a result of the drop in sales taxes that has occurred during the current economic downturn. Implementing the Friendsand#8217; public-management option, or a variation, will optimize library services during these troubled times. Itand#8217;s certain, though, that given the nature of business cycles, downturns will again occur. The county might want to consider the following measures to keep its libraries fiscally healthy over an uncertain future: 1) define and create an adequate operating reserve when net revenue once again allows the County to do so; 2) reconsider the application of A-87 overhead charges to county departments that are neither enterprise funds or financed through intergovernmental transfers, as these charges often lack adequate precision, subvert incentives to economize, and are expensive to assess; 3) adopt salary and benefit agreements that have the flexibility to respond quickly to changing economic conditions, and 4) annually adjust the General Fund contribution to reflect changes in price indices, which will ensure the county no longer uses Measure C sales taxes to supplant pre-Measure C revenue.
Richard Anderson is the publisher of California Fly Fisher magazine and a resident of Truckee.