Tough Times and Eight Ways to Deal with Them

Posted Tue, 12/29/2009 - 15:55

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Many public libraries—in Colorado, the United States, and even worldwide—are facing significant financial troubles. We are part of a larger economic system, and this is a dip in the cycle. Such dips are inevitable over the course of one’s career.

The purpose of this article is to provide an overview of some strategies for reining in expenditures without compromising the long-term integrity of our institutions. Making cuts isn’t unusual. Businesses do it. Homeowners do it. In libraries, I believe there are eight basic approaches. Not all of them are good ones.

1. Make across-the-board cuts. Just make every department in a large organization absorb a uniform percentage of reductions. Such an exercise may well help root out frivolous expenses, or discover more cost-effective alternatives. The problem is, some items-like utilities or insurance-aren’t discretionary. Some library programs and practices are more essential to our mission than others.
   This is the “nickel-and-dime” approach. It is easy, but not strategic. It is the path most taken, and one that most often leads to general decline.
2. Reduce the number (or cost) of library staff. For every public library, this is the key cost, ranging from at least 51% upwards to 80% of the annual budget. To reduce costs without losing people, some libraries freeze salaries and shift a higher percentage of the cost of benefits to the employee. When that isn’t enough, libraries seek to reduce head count. The continuum from gentle to drastic looks like this: Buy people out, freeze hiring and wait for attrition, reduce hours, force days off (furlough), or lay people off.
   Most institutions move by stages along this continuum. But this isn’t necessarily strategic, either. The people who leave aren’t always the ones you want to leave, and may be the ones doing the jobs you consider most vital. The good news: Recent jumps in technology (RFID, self-check, automated materials handling) may allow us to provide better service with fewer staff. The not-so-good news: That technology has a cost, too, and capital money may be hard to come by in a crisis.
3. Gut the materials budget. In an effort to save jobs, many libraries look to their second-largest category of spending to balance the budget: the acquisitions budget. I have concluded that this strategy is among the most dangerous. It’s easy to lose collection relevance. It’s very, very hard to get it back again. On the other hand, this might be the time to look at some benchmarks of use: How many times should an item have to be checked out to be retained? Maybe we need to buy more copies of fewer titles.
4. Reduce the number of library facilities. Buildings drive most library expenditures: staff, materials, IT, and maintenance. But be prepared: Closing a library will stir up strong emotions in almost any community. That might mean the birth of political will to raise necessary funds. It may also expose a common dilemma: People tend to demand services that they are unwilling to pay for. If that’s the case, we need to say so, or commit slow suicide by our silence.
   In general, the argument for closure must be buttressed by a clear presentation of the financial facts, as well as other service standards (cost of circulation per item, distance between locations, staffing costs per use, etc.). This strategy—reducing the number of buildings—may well allow the library as a whole to continue to provide a high level of service, but at fewer locations.
5. Reduce the hours of library operations. The fewer hours a library is open, the less it costs to run it. Most libraries have a predictable bell curve of use. A 20% reduction in hours might preserve 95% of the use-or all of it, if library users simply shift their schedules. Note that this really only saves money if it is also accompanied by a reduction in work force.
6. Raise fines and fees. Inevitably, helpful members of the public suggest that all our financial problems are easily solved. All we have to do is charge for services we now provide for “free”: Boost our fines, charge for meeting rooms, rent out internet use, assess a fee for reserves, or even charge for library cards or checkouts.
   In my experience, however, most of these don’t generate a lot of money. What they do is reduce use. But some hike in these transaction fees may make sense anyhow, both for public relations effect (“You told us to raise our fees, and we did”) and to deliberately refocus efforts from one area to another.
7. Seek private funding, whether in dollars, in-kind services, or volunteer labor. On the one hand, the more layoffs there are, the larger is the pool of potential volunteers. On the other hand, there’s less private money available. But the message of donations to a public institution whose use goes up but funding does not may well resonate with a community that now depends on the library more heavily.
8. Stop doing something you know you shouldn’t be doing anyhow. Now is the time to shake the organization out of its complacency. In all of our organizations, we’re doing something that isn’t best practice, doesn’t meet basic benchmarks of service, and costs a lot and serves few. This is the time to use the perfectly graspable explanation of “tight times” to demonstrate courageous management. 

The importance of tone

There seem to be two basic philosophies about cuts: Make them invisible, or make them clear. I belong to the second camp. 

When conscientious librarians try to absorb budget cuts without any fuss or disruption, they provide a disservice to their community. They hide the real costs of operation and suggest that there is no consequence for inadequate funding. Most people have no idea how libraries are funded, or what is necessary to keep them open. Public institutions should present as clear a case as possible about what they do, and what it takes to do it well. That’s what transparency is about.

So making budget reductions clear means this: Mount a public campaign to say just where the money comes from, and how much. Let people know that you track the success of your programs, and you won’t support those that aren’t used. There is a sprinkling of good Return on Investment studies out there now. Libraries consistently return to their communities between $4 and $8 for every tax dollar received, a statistic that is particularly impressive in today’s business environment, provided anybody hears us talk about it.

When you need to make cuts, tell people why, in simple and direct language. Say what you might cut. Invite the public to weigh in, but keep the costs of your services on the table. If something is saved, then what is supposed to take its place to ensure the sustainability of the institution? And when you decide what is going to be cut, give that a lot of publicity, too. Say when it’s going to happen, and when it happens, remind them why.

Setting the stage for the future

Today’s crisis will pass. At that time, libraries will return to the larger crisis: the plain fact that most citizens have no idea what libraries cost, that—as OCLC’s 2008 report “From Awareness to Funding” shows us—there is no relationship between use and support, that the actual expenditures on libraries are a fraction of the costs for many other services that have far less significance on our lives and communities, and that fewer libraries are making it to the ballot, or winning when they do.

A financial downturn has predictable results: Libraries all across the country are seeing an upsurge in use as people borrow what they cannot buy, attend programs that don’t require an outlay of cash, retool for a new career, hunt for new jobs, or simply hang out in a friendly place.

This gives us an opportunity not only to demonstrate our value to the public, but to be emboldened to talk about it, to point out our long history of remarkably cost-effective service delivery, and the vital significance of our institution to the infrastructure of our shared lives.

We are there for our communities when they most need us, and if that becomes part of our message, maybe we can help them learn to be there for us, too.

James LaRue is director of Douglas County Libraries in Castle Rock, Colorado.