Privatization/Outsourcing Report

Transcription

1 Purpose Privatization/Outsourcing Report Dartmouth Public Libraries December, 2008 The purpose of this report is: (1) to review the research regarding the pros and cons of the use of a for-profit company in the administration and/or operation of the Town s public libraries; (2) to determine what restrictions exist in Massachusetts State Law or Rules and Regulations governing public libraries that would pertain to contracting with a for-profit company; (3) to review the financial implications of the use of a for-profit company considering loss of current services and legal costs; (4) based upon the findings, to determine the feasibility of the Town, through the Library Board of Library Trustees, contracting with a private company in the administration and/or operation of the Town s public libraries. Privatization defined: Privatization is the shifting of library service from the public to the private sector through transference of library management and/or assets from a government agency to a commercial company. Outsourcing defined: Outsourcing is the contracting out of functions that would be otherwise performed by library employees either because they choose not to perform the function or do not have the ability to provide what is needed. It is important to note that when policy, budget control and property ownership remains with a governmental entity, there is no privatization but only contracting out for services or outsourcing. Therefore, it can be concluded that there are no public libraries in the country that are privatized; rather, some have outsourced particular functions. LSSI is currently the only company that outsources the management of public libraries. Since they started serving public libraries in 1997, LSSI had 19 contracts and currently has 14 out of 9,198 public libraries in the United States. Library Management Services in Houston, TX, services special libraries. Library Associates of Los Angeles, CA, and Rockville, MD services Federal Government and commercial libraries. Outsourcing savings are already being realized. The libraries are part of the SAILS Network. Our assessment in FY08 was $30,000 and the total value of services that we received was $220,220. This includes cataloguing, interlibrary loans, virtual catalog loans, onsite visits, workshops and PC support.

2 Executive Summary The provision of good, quality, free library services to the greatest number of people in Dartmouth is the goal of the Board of Library Trustees. The Board of Library Trustees first and foremost must consider the impact of outsourcing on eligibility for State Aid to Public Libraries. Certification in the State Aid program is essential to the provision of public library service in the Commonwealth. State Aid requirements are not relaxed or modified in any way through outsourcing. There is no evidence that outsourcing of the public library operations has saved any of the communities involved any money. The impetus for outsourcing is usually dissatisfaction with the service provided by the current management. The Board does not perceive dissatisfaction among the patrons or the taxpayers with the operation of the libraries as they voted an override for the library in April Outsourcing savings are already being realized. The libraries are part of the SAILS Network and we are also a member of the Southeastern Massachusetts Regional Library System. The Dartmouth Public Library Board of Trustees is committed to outsourcing services to non-profit agencies as long as they continue to be cost effective. The Trustees are also continuing to implement cost saving measures and are interested in pursuing any possible savings, while maintaining adequate library services. Contracting with an outside company to run a public library is a relatively new phenomenon. Currently there is only one company who could provide the service proposed. Contracting to a monopoly provider is unlikely to be an improvement over government service. There is a significant clash of interest, filtered through the political system, regarding the outsourcing of governmental services. However, both sides seem to agree that most importantly there needs to be a competitive marketplace; that is, a significant number of bidders to ensure competition, and to provide backup should the chosen provider fail. The Dartmouth Privatization Study Group encouraged the Trustees to pursue an RFP (Request for Proposal) to determine potential cost savings. In order to pursue the potential savings of outsourcing, the Board of Library Trustees has taken into consideration several costs that could be incurred and would have to be addressed before pursuing an RFP. After careful consideration, the Dartmouth Public Libraries Board of Trustees believes it is not in the best interest of the residents of Dartmouth to pursue the outsourcing of additional public library services at this time. The Board of Library Trustees and library administration will continue to monitor the outsourcing of public library operations in other states to determine the long-term effects of these outsourcing efforts and the implications for libraries in Massachusetts. Library administration will also follow any efforts in Massachusetts to outsource operations of public libraries and report to the trustees on such efforts. 2

3 Potential Financial Consequences (See Page 4 for Line Item Details) One-Time Penalties A. Estimated cost of eliminating union personnel including vacation, sick leave, and unemployment $263,000 B. Cost of Planning and Implementing a Vendor Contract $20,000 C. SAILS Library Network Buyout Fee $200,000 $483,000 Annual Recurring Costs A. Value of SAILS Library Network Service Value of Service $220,020 less Network Assessment $30,000 $190,020 B. Value of SEMLS Regional Services Funded through the State Cost to Dartmouth $0 Loss of Value of Service $234,341 C. Value of 28,837 Items Borrowed from Other $25.00 $720,925 D. Estimate of Loss of Net Lender Reimbursement $11,913 E. Estimate of Loss of State Aid $40,000 F. Potential Loss of Funds Raised by Friends of Dartmouth Libraries $21,820 G. Value of Volunteer Hours Provided by Friends of Dartmouth Libraries $3,248 H. Potential Loss of Funds Raised by Dartmouth Library Foundation $32,975 $1,255,242 Estimated Cost of Known Factors $1,738,242 Plus Yet to Be Determined Factors Cost of Possible Litigation with Union Personnel Purchasing of Automation Software Labor for Implementing New Automation Software Elimination of Grant Eligibility (i.e. $2.7 Million Construction Grant) 3

4 One-Time Penalties Potential Financial Consequences Line Item Detail A. There could be 24 union personnel fired. B. Cost of planning a proposal $15,000; cost of implementing a proposal $5,000. (Estimates received from Regional Library Administrator) C. Contract language in SAILS Library Network Contract FY 2009 Annual Recurring Costs A. The Dartmouth Public Libraries outsource with the SAILS Library Network, a non-profit organization. The network operates, maintains, and supports the public catalog (ibistro) and the circulation system for residents to request and check out materials. The system provides access to a collection of over 3,567,611 items worth over $79 million. (SAILS Library Network FY 08 Annual Report) B. Southeastern Massachusetts Regional Library System (SEMLS) is a multi-type library cooperative funded through the State. SEMLS provides support services that include delivery (the interchange of library resources and strategic communications among members) regional reference service, Interlibrary Loan, continuing education, advisory and technical assistance, and supplemental services that include Cooperative Purchasing Programs for both library materials and supplies. C. FY 08 Cost Benefit Analysis. Refer to Appendix for list of libraries providing materials to the residents of Dartmouth. D. Net Lender Reimbursement Program that provides funding for materials lent to other members of the region. E. The Massachusetts Board of Library Commissioners administers the State Aid to Public Libraries Program. Three grants, each based on a different disbursement formula, are awarded to municipalities whose public libraries meet statutory and regulatory requirements. In addition to these grants, the MBLC also administers Federal LSTA (Library Services and Technology Act) grants. These include Public Library Construction Grants such as the one offered to Dartmouth in the amount of $2.7 million. F. The Friends of Dartmouth Libraries were established in Their fundraising activities have raised hundreds of thousands of dollars through the years. G. New initiatives have begun to increase the number of volunteer hours that the Friends provide. H. In 2004 the Dartmouth Library Foundation, Inc. was formed to supplement fundraising activities that the Friends were providing. The State initiated a Public Library Fund in FY 07 to award matching funds for fundraising efforts by groups like the Friends and the Foundation. 4

5 Factors Taken Into Consideration Employment issues need to be considered in the process of outsourcing. The current collective bargaining contract with the Dartmouth Town Employees Association and related issues must be adequately addressed, and there would be a cost to do so. An estimated cost of eliminating library union personnel including vacation, sick leave and unemployment would be $263,000. The cost of potential litigation is unknown. (In Jackson County, Oregon, in February 2008 the employees filed a complaint with the National Labor Relations Board. Workers rehired by LSSI will still be unionized, and LSSI must enter into labor negotiations. In Jersey City, New Jersey, the library trustees contracted with LSSI. The employees sued. The NJ state court nullified the contract and issued a prohibition against the establishment of a private workforce within the library.) All applicable state laws and regulations have to be adequately addressed, and there would be legal cost incurred to do so. LSSI is a privately-held company and does not disclose earnings. We have no way of knowing how solvent they are, how much profit they make or how long they will be in business. It takes significant lead time to plan and implement a contract. Start up costs may be incurred. Costs need to be monitored and need to be continually assessed as needs and costs change. If the Trustees are dissatisfied, the only control or recourse is to cancel or not renew the contract. How will the Town reassume responsibility for the contracted functions or activities should the contractor fail to meet the performance terms of the contract? It is the consensus of the Board of the Friends of the Dartmouth Libraries that they would not be willing to continue their volunteer efforts in support of a profit- making company. Thousands of dollars would be lost on an annual basis, not to mention a tremendous amount of good will. The Friends raised $21,820 in FY08. The Dartmouth Library Foundation, Inc., if they choose to continue, could find it more difficult to solicit donations not only from individuals but also from the business sector. The Foundation raised $32,975 in FY08. Other communities reasons for contracting with LSSI: Six communities converted from county to city/town governance One community converted from city to county government Four communities had new building projects Four communities had problems hiring qualified personnel 5

6 Zero communities were found to have contracted with LSSI simply to save money. (See Appendix A for a listing of communities with current contracts with LSSI and communities that no longer contract with them.) California has the longest history with LSSI: Riverside County Library System in California contracted with LSSI in It had previously outsourced the operation of the library system to the City of Riverside. In December 1996, the City of Riverside, due to conflicts, did not renew its contract to run the county system effective July Within six months the county had to create a new county agency from scratch or find a new vendor to run the library. The administration and operation of the Riverside County Library System is not privatized. The county contracts with LSSI, and LSSI operates entirely under the supervision of the County Librarian. In 2001, the County Librarian stated that the arrangement has worked well in providing the service the County desires. He stated that other governmental entities considering this type of arrangement should realize that it does not necessarily save money. Calabasas Public Library in California belonged to a county library system but withdrew from the system as it was determined that an independent municipal library would better serve the community. The city contacted only one vendor as their feasibility study indicated that there was only one company that could provide the services to operate the library. In 1998 the city contracted with LSSI and signed another three year contract in However, the city took over the operation in 2003 when the library moved into a new, expanded facility. As the city grew and gained expertise in areas, it began to bring programs that were once contracted out back in house. Los Angeles County Public Library System does not contract with an outside source, but they did conduct a 15-month study on the Riverside County experience to determine the feasibility of such an approach for LA County. It was determined that LSSI could not offer what they needed any better than what they could provide themselves. After reviewing the experiences of other states, it is concluded that it is advisable for a local government who outsources the operations of its public library to have an inhouse expert or persons knowledgeable in library management and operation to serve as contract manager(s). This would reduce any type of cost savings substantially. Will library administration be responsible for monitoring contractor performance? If not, who will? This cannot be the responsibility of a part-time Board of Library Trustees. The best services or programs for outsourcing are those with clearly-defined tasks to be done, where good unit cost data can be developed for comparison, where there are good quality and quantity measures available to aid monitoring of the delivery of services, and where private sector providers already exist. In contrast, library 6

7 administration and operations require great independent judgment, including anticipating and interpreting community needs, developing and evaluating services, interaction with the community, citizens groups and other agencies. Laws governing public libraries in other states are very different from Massachusetts in requirements for library funding, for structures for budget and policy oversight and control, for public library management, and other requirements such as hours of service and materials expenditures. Additionally, the unionization of library staff in Massachusetts plays into decisions regarding the outsourcing of operations. The federal government has drawn a line. In Southern California, 13 public libraries serve as Passport Acceptance Agencies. However, one Riverside community s application for its library branch, run by LSSI, was declined because the State Department will only designate public employees to serve on its behalf. There are no definitive studies of the long-term effects on service of outsourcing the operations of a public library. There is a concern that the library, under distant, corporate management will be less attuned to local interests when buying books and will stock the shelves with lots of best sellers because they are profit driven. If the corporation decides that books on manmade climate change do not sit well with their corporate investors, stockholders or partners, do not expect to find books by Al Gore on the library shelf. Depending on the alliances, coming off the shelves could be books by Michael Moore or Gore Vidal. Perhaps it could swing in the other direction and books by Bill O Reilly and Ann Coulter would disappear and become unavailable. Materials selection would need to be controlled by in-house staff. The FBI has made no secret of its use of National Security Letters, subpoenas without warrants, aimed at library circulation records of readers. Although public library employees have resisted government surveillance, the same may not hold true with privatized at-will library employees. What happens to patron confidentiality when a private company is responsible for public records? Understaffing by the contract agency can occur to keep costs down need to specify the levels of staffing in the contract. Libraries began in America as private institutions that were supported by members and philanthropists. Books were the restricted province of a few. The first large, publiclysupported municipal library did not exist until 1848, when an act of the State Legislature authorized Boston to establish a public library. Are we moving forward or backward? 7

8 Direct Responses to Privatization Study Group Report The Dartmouth Privatization Study Group reports that LSSI can potentially save us very significant money while improving the service to users via more open hours, and hightech improvement; however the only research they provide us with is information that comes directly from LSSI, a for-profit company. The Dartmouth Privatization Study Group states that LSSI has experience with specialized computer software and are able to automate library operations. The Dartmouth Public Libraries are fully automated, use specialized computer software, and outsource cataloguing and automation to SAILS Library Network, a non-profit corporation located in Middleborough, Massachusetts. There would be a buyout fee of approximately $200,000 if we choose to end our relationship with SAILS. All of our neighboring cities and towns are members of this network. There would be a massive cost increase to abandon network membership and form a local collaborative. At the same, there would be a tremendous drop in library service to Dartmouth patrons due to the loss of the network access shared by all surrounding communities. The collaborative already exists and provides residents access not only to neighboring libraries, but to most public and many academic libraries in the Commonwealth. The Dartmouth Privatization Study Group states that we are only certified now through a waiver, and we believe that the waiver scenario is unlikely to continue since the library budget will surely decrease not increase The Board of Library Trustees reviewed the State Aid to Public Libraries Award History. The current waiver process has been in place since Most recently, 2004, was a very bad year, 70 libraries applied for waivers and 65 were granted. Things started to turn around for many communities in 2005, 50 applied/ 44 granted; 2006, 31 applied/ 28 granted; 2007, 22 applied/17granted; 2008, 19 applied, 13 granted. Many other communities have faced fiscal hardship and have managed to turn things around. Provided that the Town can continue to provide evidence that any necessary reduction to the library budget is not disproportionate relative to changes in other municipal departments and the overall budget, the likelihood of receiving a waiver is excellent. The Dartmouth Privatization Study Group voiced their concern about saving library services in the community. Their report states, A library service is important, but will always be less important than things like the Police and the DPW when tough financial decisions have to be made We felt that if significant money could be saved, without degrading the service to the community, then the library would stop looking like low hanging fruit for budget cuts. The Board of Library Trustees feels strongly that the public libraries are as important as the Police and DPW. Libraries build communities, foster civic engagement, engage citizens in public decision making, and transform communities and lives. Citizens need safe places to deliberate issues, particularly during the election season and in these challenging economic times. Libraries promote 8

9 thoughtful civil discourse and help citizens become engaged and able to make informed decisions. Libraries can help communities discover new and innovative solutions to persistent public problems and build community through encouraging public deliberation. Libraries stand for hope, for learning, for progress, for literacy and for self improvement. The library is a symbol of opportunity, equality, freedom of speech and freedom of thought. Everyone does not have the attitude that libraries should be treated as low hanging fruit. Many Dartmouth residents are involved in the community. They recognize the public library is a noble place, important and relevant to the quality of life in the community. They recognize the value of passionate librarians in the education of our children and as true advocates for lifelong learning. They see the library as a vital community resource like Police and DPW and are willing to support it financially. The public library s value to the community goes beyond the information it provides, but rather serves as a window to the world that allows each and every resident in the community to seek out and achieve their potential. Dartmouth Privatization Study Group s opinion is not representative of the community s attitude toward their library. The Group has the undeniable right to voice their opinion, but opinion is not fact. The Dartmouth Privatization Study Group acknowledges that privatization would not help with the certification issue, which always requires more spending, however, that legislation should be pushed at for change, as this will become a problem for more and more communities. The Massachusetts Board of Library Commissioners is the agency of state government with the statutory authority and responsibility to organize, develop, coordinate and improve library services throughout the Commonwealth. The Board also strives to provide every resident of the Commonwealth with full and equal access to library information resources regardless of geographic location, social or economic status, age, level of physical or intellectual ability, or cultural background. The goals of the Board are to maintain and strengthen the Commonwealth's free public libraries, provide statewide and regional programs for the improvement of library services provided by libraries of all types, support resource sharing and the utilization of electronic information technology by libraries, and provide specialized library services to blind and physically handicapped residents. The Board was established in 1890 under Chapter 78 of the Massachusetts General Law, and is governed by nine Commissioners appointed by the Governor. The director of the Board is appointed by the Commissioners and is responsible for the administration of the programs and advisory services of the Board. The laws that have been passed at the state level since 1890 were put in place to protect public library services statewide, to prevent these musthave services from being decimated and treated like low hanging fruit. The American Library Association affirms that publicly-funded libraries should remain directly accountable to the public they serve. Therefore, the American Library Association opposes the shifting of policy making and management oversight of library services from the public to the private for-profit sector. (ALA Council 2001) 9

10 Restrictions/ Massachusetts General Laws and Code of Massachusetts Regulations In considering the potential of contracting with a private company for the administration and/or operation of public library services, the Board of Library Trustees would need to seek the advice of legal counsel in regard to such matters as: MGL 78:11 Board of Trustees ; powers and duties as it relates to the role of the elected Board of Trustees regarding library funding and custody and management of the library MGL 78:34 Employment contracts for library directors MGL 30B Uniform Procurement Act MGL 39:23A, 23B, 23C, 24 Open Meeting Law MGL 66 Public Records Law MGL 78:19A State aid; determination as it relates to the Municipal Appropriation Requirement MGL 78:19B State aid; annual reports by libraries; requisites for aid. This section establishes minimum standards of free public library service ( further defined in regulations 605 CMR 4.00: Free Public Library Service) that must be met in order for a municipality to be certified to receive State Aid to Public Libraries: 1) Be open to all residents of the Commonwealth 2) Make no charge for normal library services 3) Be kept open a minimum number of hours per week 4) Employ trained personnel 5) Expend a reasonable portion of the library s total budget on library materials 6) Lend books to other libraries in the Commonwealth and extend privileges to the holders of cards issued by other public libraries in the commonwealth on a reciprocal basis 7) Include in their annual report the total number of non-resident loans and nonresident circulation as a percentage of the library s total circulation. 10

11 Conclusions The provision of good, quality, free library services to the greatest number of people in Dartmouth is the goal of the Board of Library Trustees. The Board of Library Trustees first and foremost must consider the impact of outsourcing on eligibility for State Aid to Public Libraries. Certification in the State Aid program is essential to the provision of public library service in the Commonwealth. It is also a prerequisite to special grant funding including Public Library Construction and Library Services and Technology Act grants. State Aid requirements are not relaxed or modified in any way through outsourcing. To put things in perspective there were 338 library systems that were certified in Massachusetts in FY08. Thirteen library systems were not certified; out of these, nine did not apply/ineligible, one was denied and three towns have no library. According to our research, outsourcing the day-to-day operation of a public library is not something that is sought for a library that can readily solve its own problems, but rather for a library with multiple problem issues that cannot be solved in-house and a need for immediate action. There is no evidence that outsourcing of the public library operations has saved any of the communities involved any money. The Trustees must be the entity to determine if its needs are such that outsourcing is required to provide better library service to its citizens and library patrons. The impetus for outsourcing is usually dissatisfaction with the current operations. The Board does not perceive dissatisfaction among the patrons or the taxpayers with the operation of the libraries as they voted an override for the library in April Outsourcing savings are already being realized. The libraries are part of the SAILS Network. Our assessment in FY08 was $30,000 and the total value of services that we received was $220,220. This includes cataloguing, interlibrary loans, virtual catalog loans, onsite visits, workshops and PC support. We are also a member of the Southeastern Massachusetts Regional Library System, and in FY07 (the FY08 figures are not yet available) the region provided $234,341 in the total value of service to the Dartmouth Public Libraries. This includes delivery service, supplemental reference service, electronic databases, mediated interlibrary loans, continuing education/workshops, consulting, supply and materials cooperative purchasing programs and summer reading supplies. OCLC, the Online Computer Library Center is not free. We are a member of OCLC because of our network and regional memberships. Dartmouth residents are already paying taxes to the State that supports the five library regions and the seven library networks across the state, along with telecommunication costs. Failure to be certified would result in Dartmouth residents subsidizing library services in other communities rather than their own. The Dartmouth Public Library Board of Trustees is committed to outsourcing services to nonprofit agencies as long as they continue to be cost effective. The Trustees are also continuing to 11

12 implement cost saving measures and are interested in pursuing any possible savings, while maintaining adequate library services. It is important to note that the libraries in FY07 were 1.68% of the total town budget and 1.34% in FY08. The Trustees are aware that we must be as cost conscious as possible. Any cost savings that we can realize should be reinvested in improving library services. Contracting with an outside company to run a public library is a relatively new phenomenon. The local marketplace does not have enough potential vendors both now and for the foreseeable future to ensure competition. Contracting to a monopoly provider is unlikely to be an improvement over government service. Currently there is only one company who could provide the service proposed. This company, LSSI, has contracts with 14 public libraries out of 9,198 in the United States. There are five communities who had contracts with LSSI but no longer contract with them. Library Management Services in Houston, Texas, handles law firms and corporations. Library Associates in Los Angeles, California, and Rockville, Maryland, provides consulting and staffing services to law firms, US government agencies, hospitals and corporations. There is a significant clash of interest, filtered through the political system, regarding the outsourcing of governmental services. However, both sides seem to agree that most importantly there needs to be a competitive marketplace; that is, a significant number of bidders to ensure competition, and to provide backup should the chosen provider fail. Privatization initiatives in Massachusetts began during Governor Weld s administration. Initially there were three simple criteria for selecting privatization projects. Criteria #3, states there must be more than one vendor able to perform the service or you lose the benefits of competition. In 1993, the governor s guidelines were revised, and the criteria were expanded from three to seven. Criteria #1 calls for a competitive marketplace; the desire for multiple potential providers and a warning to avoid the creation of monopolies. Criteria #5 addresses choosing services for privatization that allow for minimal risk, including the likelihood of private failure, or a reduction or stoppage of services if losses occur, and the consequences of such an occurrence. (LSSI is a privately-held company and does not disclose earnings. How does one judge their solvency or future existence?) Criteria # 6 calls for choosing services for privatization that have no insurmountable legal, political or practical barriers. The desire is to avoid strong opposition, loss of public trust, or conflict with federal or state law. Criteria #7 suggests choosing services that will have minimal adverse employee impact including avoidance of conflict with collective bargaining agreements and maintaining diversity of the workforce. The Dartmouth Privatization Study Group encouraged the Trustees to pursue an RFP (Request for Proposal) to determine potential cost savings. In order to pursue the potential savings of outsourcing, the Board of Library Trustees has taken into consideration several costs that could be incurred and would have to be addressed before pursuing an RFP. Cost of legal counsel in seeking advice regarding Massachusetts General Laws and the Code of Massachusetts Regulations. 12

13 Buy out cost of current employee benefits and possible unemployment benefits. Potential cost of a labor union lawsuit. Costs associated with planning, implementing and contracting with an outside agency. Development of a complete cost analysis to document potential savings Cost of developing a personnel redeployment plan and a contingency plan in case of the termination of the service contract. Cost of buyout fee from SAILS network. Cost of manpower to define distinctly the service involved to produce an RFP. After lengthy study, the Dartmouth Public Libraries Board of Trustees believes it is not in the best interest of the residents of Dartmouth to pursue the outsourcing of additional public library services at this time. The Board of Library Trustees and library administration will continue to monitor the outsourcing of public library operations in other states to determine the long-term effects of these outsourcing efforts and the implications for libraries in Massachusetts. Library administration will also follow any efforts in Massachusetts to outsource operations of public libraries and report to the trustees on such efforts. 13

14 Reviewing the Research The following documents were reviewed in the development of this report: Privatization of Public Libraries: A List of Information Resources Maureen Killoran, Head, Public Library Advisory Unit Massachusetts Board of Library Commissioners Privatization Study Group Report to the Select Board April 28, 2008 Frank Gracie Chairperson Report on Privatization of Public Libraries Pros and Cons The Florida House of Representatives Committee on Tourism January 2002 Public Library Outsourcing Checklist Florida State Library October 12, 2000 Florida Public Libraries & Privatization: A Guide for Florida Library Boards and Friends Florida State Library September 2000 Communities with current contracts with LSSI Communities who had contracts with LSSI but no longer contract with them July, 2008 Denise Medeiros Director Dartmouth Public Libraries The Outsourcing of Public Library Management Robert C. Ward Louisiana State University January 2007 Privatization Study Group Report to the Board of Library Trustees July 29, 2008 Frank Gracie Chairperson The Need for a Privatization Process: Lessons from Development and Implementation Bruce Wallin, Northeastern University Public Administration Review, January/February 1997, Vol. 57, No. 1 14

15 Competition & Government Services: Can Massachusetts Afford the Pacheco Law? Geoffrey Segal, Adrian Moore and Adam Summers Pioneer Institute for Public Policy Research Boston, MA October 2002 Privatization in Massachusetts: Getting Results November, 1993 Privatization of State Services in Massachusetts: Politics, Policy and the Experiment That Wasn t Bruce Wallin Department of Political Science, Northeaster University Prepared for the Economic Policy Institute, Washington, DC. Massachusetts General Laws Chapter 7: Section 52. Privatization contracts; need to regulate Chapter 7: Section 53. Definitions Chapter 7: Section 54. Statement of services; wage rates; health insurance; hiring of former agency employees; cost estimate; bids; certification to state auditor Chapter 7: Section 55. Objection by state auditor; review SAILS Library Network Value of Services provided to Dartmouth Public Libraries FY08 SEMLS, Southeastern Massachusetts Value of Services provided to the Dartmouth Public Libraries FY07 Massachusetts Board of Library Commissioners State Aid To Public Libraries Award History Fiscal Year Library Associates Library Management Services, Inc. - The proceeding documents are available at the Southworth Library in the local interest/ reference section. The entire privatization report is available online at 15

16 Appendix A. Communities who had contracts with LSSI but longer contract with them: Jersey City, New Jersey population 240,055 The Trustees were unhappy with the rate at which the library was moving towards automation. Trustees contracted with LSSI. The employees sued. The NJ state court nullified the contract and issued a prohibition against the establishment of a private workforce within the library. Linden, New Jersey population 39,394 Library director was unwilling to update the library as she was nearing retirement. It became a director vs. trustees battle. The trustees contracted with LSSI to manage the library but the unionized staff remained public employees only they reported to the firm s management. The quality of LSSI s performance slipped especially in terms of timely payments of outstanding bills and Linden did not renew their contract. Fargo, North Dakota population 99,200 The Trustees could not find a library director. Hired and fired 3 directors in a 5 year period. Unable to attract a qualified director signed a 2 year contract with LSSI. After two years LSSI s proposed budget exceeded financial expectations and they did not renew. Hemet, CA population 70,000 Hemet received funding for a new 47,000 square ft. facility. The library director resigned. They could not find a qualified director sought a temporary solution with LSSI City of Calabasas, CA population 23,123 Was part of county system and became city operated. They built a new 25,000 sq. ft. building. Budget = $981,344 Appendix A.

17 The 14 public libraries out of 9,198 in the United States who currently contract with LSSI Converted from County to City/Town Governance: Arlington, TN population 3,693 Was managed by a county system and the Town was unhappy, so they took it over and contracted with LSSI. Costs rose from $100,000 to $120,000 in 3 years. In addition, the Town spent $200,000 on capital improvements as they wanted a better library. Collierville, TN population 38,678 Previously run by the county but the Town wanted more fiscal accountability, as they were investing ten times as much in library services as in past years. They contracted with LSSI. FY08 budget = $1,095,801 Germantown, TN population 37,000 Was a branch of a county system and was taken over by the Town. They contracted with LSSI for operating expenses exclusive of utilities, building and ground maintenance. Their FY07 budget was $1,377,168. Moorpark, CA population 35,668 Was also once part of a county system and was taken over by the town. FY budget = $761,062 General Fund, Library facilities fee and earnings $596,422, Special revenue 81,500. Total = $1,438,984. New Building Projects: Leander, TX population 7,596 LSSI contracted to oversee new $3 million facility 18,000 sq. ft. Redding/Shasta County, CA population 180,000 Redding hired LSSI to embark on a building project: $20 million 56,000 sq. ft. new facility and two branches. Once again control reverted to the city from a county system. Their budget was $1.9 million. The contract with LSSI was for $1.44 million. Redding pays maintenance, utilities and overhead. Problems Hiring Qualified Personnel: Lancaster (Texas) Veterans Memorial Library population 36,000 Lancaster s FY08 budget was $685,500 in general operating expenses with an additional $60,000 in a capital line for books, totaling $745,500. Dartmouth was appropriated $878,196 in FY 08. This is a potential savings of $132,696. However, the contract with LSSI does not include utilities, maintenance or other capital expenses. In FY 08, the Dartmouth Library budget included utilities, maintenance and capital expenses in the amount of $148,320. The Dartmouth library s appropriation without utilities, maintenance and capital for FY 08 would be $729,876 - $15,624 less than Lancaster. Lancaster Library had a full time city Appendix A.

18 employee who was the library director and who had completed the majority of a new building program. The library director resigned to take a new position. The remaining library staff did possess neither the professional experience nor the training needed to complete the project and manage the library. The city council decided to contract with LSSI to complete the project and to provide management services for the library. The library s new facility was 23,000 square feet and cost $4 million. San Juan, TX population 47,000 Budget = $220,000. They are in a modular facility that is 2,300 sq. ft. They could not get a degreed candidate to manage the library so they contracted with LSSI. Converted from City to County Government: Riverside, CA population 300,000+ Main Library and 5 branches Was run by the city and converted to a county system when the city would not renew the contract. They had six months to come up with an alternative plan. They were the first public library to contract with LSSI in All employees, except for the director, who remained a county employee, become employees of LSSI. Their salaries remained the same but their retirement and benefit packages changed. Miscellaneous: Jackson County, OR population 195,000 Libraries were all closed and they contracted with LSSI to reopen some of them. The contract was for $5 million with an additional budget of $1.5 million for maintenance and utilities. February 2008 employees filed a complaint with the National Labor Relations Board. Workers rehired by LSSI will still be unionized and LSSI must enter into labor negotiations. Finney County, KS population 39,097 Operating budget = $829,834 (not able to find out what fiscal year this is/ County budgets on the whole were not readily available) Madison, Co, TN population 95,894 Main Library and 1 branch Millington, TN population 10,336 Red Oak, TX population 4,301 Budget = $142,645 Budget = $133,061 Appendix A.

19 Appendix B. Libraries Providing Materials for Borrowing by Dartmouth Residents Abington Public Library Attleboro High School Boston Latin Academy Acton Memorial Library Acushnet Russell Memorial Library Adams Free Library Agawam Public Library American International College Amesbury Public Library Amherst Jones Library Inc. Anna Maria College Arlington Ashland Public Library Ashby Free Public Library Athol Public Library Auburn Public Library Atlantic Union College Avon Public Library Ayer Library Barre-Woods Memorial Library Bristol Community College Bedford Public Library Belmont Public Library Belchertown Clapp Memorial Library Bellingham Public Library Berkshire Community College Berkley Public Library Berlin Public Library Bernardston Cushman Library Beverly Public Library Bunker Hill Community College Billerica Public Library Board of Library Commissioners Blackstone Free Public Library BLC Union List Bolton Public Library Jonathan Bourne Public Library Boxford Village Library Boxborough Library Boston Public Library Boston High School Boston Latin School Thayer Public Library Brewster Ladies Library Appendix A. Bridgewater State College Library Brighton High School Brookline Public (MLN) Brookfield Merrick Public Library Brockton Public Library Harwich Brooks Free Library Buckland Public Library Jeremiah E. Burke High School Burlington Public Library Bridgewater Public Library Bolyston Public Library Cambridge Public Library Canton Public Library Carlisle Public Library Carver Public Library Wilkens Library CCCC Charlton Public Library Charlestown High School Chatham Eldredge Public Library Chicopee Public Library Chelmsford Public Library Chelsea Public Library Cheshire CLAMS Key Library Clarskburg Town Library Clinton Bigelow Free Public Library C/W MARS Central Mass. Libraries Central Mass Regional Library System Paul Pratt Memorial Library Colrain Griswold Memorial Library Concord Public Library Condon Elementary School Cooley Dickinson Hospital Library Cotuit Library Centerville Public Library Dalton Free Public Library Danvers Library Dean College Dedham Public Library Dennis Public Library Dighton Public Library Dorchester High School Douglas Simon Fairfield Library Dover town Library

20 Appendix B. Libraries Providing Materials for Borrowing by Dartmouth Residents Dracut Public Library Pearl L. Crawford Memorial Library Dunstable Public Library Duxbury Free Library Easthampton East Boston High School Eastham Public Library Easton East Brookfield Public Library East Bridgewater Public Library East Bridgewater High School East Bridgewater Middle School Edgartown Public Library Edison Middle School Edwards Middle School Elms College Alumnae Library East Longmeadow Public Library Emerson College Library Emmanuel College Endicott College English High School Erving Public Library Essex Public Library (TOHP) Everett Public Libraries Fairhaven Fall River Durfee High School Falmouth Public Library Fitchburg Public Library Fenway Libraries Online Florence Lily Library Florida Free Library Foxboro Boyden Library Framingham Public Library Freetown Libraries Franklin Public Library Frontier Regional School Library Framingham State College Gardner L. Heywood Memorial Library Georgetown Peabody Library Gloucester Library Gordon College Grafton Public Library Granby Free Public Library Great Barrington Mason Library Greenfield Community College Library Granville Public Library Groton Public Library Groveland Public Library Hadley Goodwin Memorial Library Halifax Holmes Public Hamilton Wenham Public Library Hampden Free Public Library John Curtis Free Library Hanson Public Library Harvard Public Library Hatfield Public Library Haverhill Public Library Holyoke Community College Library Heath Free Public Library Hinsdale Public Library, Inc. Hingham Public Library Holden Gale Free Library Holliston Public Library Holbrook Public Library Holland Public Library Holland Elementary School Holyoke Public Library Hopedale Bancroft Memorial Library Hopkinton Public Library Hubbardston Public Library Hudson Public Library Hull Public Library Hyannis Public Library Hyde Park High School Ipswich Public Library Kingston Public Library Lakeville Free Public Library Lancaster Thayer Memorial Library Lasell College Library Lawrence Public Library Leicester Public Library Lee Elementary School Lenox Library Association Leominster Public Library Lesley University Libraries Leverett Library Lexington Lynnfield Public Library Longmeadow R.S. Storrs Library Lincoln Public Library Littleton Public Library

21 Appendix B. Libraries Providing Materials for Borrowing by Dartmouth Residents Lowell Public Library Ludlow Hubbard Memorial Library Lunenburg Public Library Lynn Public Library Lee Library Association Madison Park Tech Voc. HS Malden Public Library Mansfield Public Library Marblehead Library Marion Elizabeth Taber Library Marlborough Public Library Marshfield Fentress Memorial Library Marstons Mills Public Library Mashpee Public Library Massasoit Community College Mattapoisett Public Library Maynard Public Library Massachusetts Bay Community College Boston Public Library ILL Department Massachusetts College of Art Middlesex Community College Manchester-by-the-Sea Public Library Massachusetts College of Liberal Arts Massachusetts College of Pharm & Hlth Sci Medford Public Library Melrose Public Library Memorial Hall Library, Andover Mendon Taft Public Library Merrimack College Merrimac Public Library Methuen Public Library Middleboro Public Library Middleton Public Library Millis Public Library Milford Town Library Millbury Public Library Milton Public Library Millville Free Public Library Medfield Public Library MLIN MLIN Key Library Massachusetts Maritime Academy Montserrat College of Art Monson Free Library Monterey Rowley Public Library Mount Ida College Merrimack Valley Library Consortium Mt. Wachusett Community College Library Medway Public Library McCormack Middle School Nantucket Atheneum North Adams Public Library Natick New Bedford High School New Bedford North Brookfield Newbury College Nease Library, ENC New England Conservatory Needham Public Library Northern Essex Community College Newburyport Public Library Newbury Town Library New Marlborough North Attleboro NOBLE Northampton Forbes Library Norwood North Andover Stevens Memorial Norfolk Public Library Norton Public Library Norwell Public Library Northborough Free Library North Reading Public Library Northfield Dickenson Memorial Library New Salem Public Library North Shore Community College Newton Free Library Oakham Forbes Memorial Library O Bryant School of Math & Science Old Colony Library Network Key Ohrenberger Elementary School Orange Wheeler Memorial Library Osterville Free Library Oxford Free Public Library Palmer Public Library Phillips Academy Pathfinder Regional Tech. HS Peabody Library Pembroke Public Library Pepperell Lawrence Library Petersham Memorial Library

22 Appendix B. Libraries Providing Materials for Borrowing by Dartmouth Residents Pittsfield Berkshire Athenaeum Plainville Public Library Plymouth Public Library Plympton Public Library Princeton Public Library Provincetown Public Library Paxton Richards Memorial Library Quinsigamond Community College Library Quincy Elementary School Turner Free Library Raynham Public Library Reading Public Library Rehoboth Blanding Free Public Library Revere Public Library Richmond Free Public Library Rochester Public Library Rockland Memorial Library Rockport Public Library Rogers Middle School Rutland Free Public Library SAILS Library Network Key Library Salem Public Library Salisbury Public Library Sandwich Public Library Saugus Public Library Southbridge J. Edwards Memorial Library Springfield City Library Scituate Town Library Seekonk High School Library Seekonk Middle School Library Seekonk Public Library South Hadley Public Library Sharon Public Library Shelburne Free Public Library Sheffield Bushnell-Sage Library Shirley Hazen Memorial Library Shrewsbury Public Library Shutesbury MN Spear Memorial Library State Library of Massachusetts School of Museum of Fine Arts Orleans Snow Library Snowden International School Deerfield Tilton Library Southampton Edwards Public Somerville Public Library Somerset Public Library South Boston High School Spencer R. Sudgren Public Library Salem State College Springfield Tech Community College Library Stockbridge Library Association Sterling Conant Public Library State Transportation Library Stow Randall Library Stoneham Public Library Stoughton Public Library Sturbridge J. Hyde Public Library Barnstable Sturgis Library Sudbury Goodnow Library Sunderland Public Library Sutton Free Public Library Swampscott Public Library Swansea Public Library Southwick Public Library Taunton Public Library Taunton High School Library Tewksbury Public Library Templeton Boynton Public Library Topsfield Town Library Townsend Public Library Truro Public Library Turners Falls Carnegie Public Library Tyngsborough Public Library UMass Amherst Umana/Barnes Middle School UMass Boston UMass Dartmouth Library UMass Lowell Upton Town Library URSA Bootstrap Library Uxbridge Free Public Library Vineyard Haven Library Wakefield Library Waltham Public Library Wales Public Library Walpole Public Library Young Men s Library Association Wareham Free Library Warren Public Library Watertown Public Library Westfield Athenaeum Warwick Free Public Library