In Nevada County, CA, an Outsourcing Proposal Stirs Controversy

Committees recommend against LSSI bid; county administrator to make recommendation this week

Norman Oder -- Library Journal, 02/16/2010

• Sales tax down
• Outsource or reduce services temporarily?
• Large percentage of cardholders
• Little public support for LSSI plan

In what has become a huge local controversy, administrators in rural Nevada County, CA, aiming to meet reduced library revenues caused by a declining economy, are considering outsourcing the Nevada County Library to Library Systems & Services, LLC (LSSI), which has lower labor costs and more labor flexibility.

In response, local Friends groups and other library supporters have held public rallies and stepped up fundraising, culminating in a six-hour telethon planned for Saturday, February 20, in which they hope to raise $100,000, one-quarter of the anticipated deficit. A vote by the county Board of Supervisors is expected February 23.

“We’re a pretty high-functioning library system, we’re not a broken system,” County Librarian MaryAnn Trygg told LJ, contrasting the system with some others run by LSSI, such as Jackson County Library Services, OR, where the system had closed. “We’re simply a system that’s short on funding.”

There has been a spirited local discussion, in the press and in blogs, with a significant amount of transparency on the part of the country government, which has posted meeting notes, documents, and various FAQs. There is little overt support for the LSSI plan, though a now-defunct web site, Save Nevada County Libraries, was set up by anonymous supporters of the private management option, and criticized by local blogger Don Pelton. (The site has vanished, but can be viewed via Google’s cache.)

Sales tax blues
Nevada County, which comprises 978 square miles in northern California, has a population of about 99,000, in two centers—Grass Valley/Nevada City and Truckee—separated by approximately 45 miles of National Forest and the Donner Summit mountain pass.

It has a Gold Rush history, state parks, and a significant tourist economy. More than 70 percent of library funding comes from a 1/8-cent sales tax, first passed in 1998 and renewed in 2002 that will remain in place until 2018.

About two years ago, however, the tourist economy and the sales tax began to decline. The library, which had hoped for $1.6 million in sales tax to support its $2.4 million budget, likely will see about $1.2 million for the fiscal year ending June 30. The system includes three larger libraries, two small ones, and the noncirculating Doris Foley Library for Historical Research.

Last year Trygg recommended temporary closing of one of the smaller libraries, which is a joint-use facility with a high school, as well as the Foley library, which could reopen with volunteers. A public outcry scotched that plan. Later, Trygg recommended other cuts, but, according to an October 1, 2009 memo from CEO Rick Haffey to the Board of Supervisors, even those additional cuts could not “sustain the current method of delivering library services.”

Outsourcing emerges
In what many library supporters deemed a surprise, the county issued an RFP for private management, following Haffey’s recommendation that “These difficult and challenging times require fresh thinking and a new outlook on how to deliver services.” 

Haffey told LJ he had heard about two other counties in California that were using LSSI. He sent staffers to the Riverside County Library System in Southern California and visited the Shasta County Libraries in Northern California.

“I really couldn’t tell the difference” between a publicly managed library and a privately managed one, he told LJ, and got a similarly positive report from those visiting Riverside. (LSSI’s record is more mixed, as LJ has reported.) He said the county purchasing department issued the RFP based in part on that issued by Riverside. (LSSI is the only company that offers full library outsourcing, though.)

LSSI was the only entity to respond with a full proposal (4MB PDF), though the Friends of the Libraries of Nevada County proposed to run the Foley Library for two days a week at no fee, as long as the county would pay such costs as utilities and maintenance.
 
LSSI's proposal promised to "hire sufficient experienced and qualified staff members" to operate all branches for specified hours, but did not specify numbers.

Local deliberations
The county asked three committees to offer recommendations. The Measure C Citizens’ Oversight Committee (COC), which was set up to oversee the sales tax revenues, recommended Option A, developed in consultation by the Truckee Friends of the Library; it calls for reduced hours for the libraries and librarians but only one librarian layoff (of 6.6 FTE), maintaining services so they can be restored in better times.

The other Librarian positions would be reduced to 30 or 35 hours per week, except for the two Children’s Librarians, which would be reduced to 20 hours per week.

“The COC also recommends that the County Librarian begin an intensive process of streamlining internal library functions in order to further cut expenses,” said its report. 

COC member Ruth Hall, also a member of the Friends of the Truckee Library, told LJ that library supporters were dismayed that the county so quickly considered outsourcing without exploring other options. She said they also were concerned that “staff we worked hard to attract to our rural county” might be lost.

“The county library system in Nevada County is exceptionally popular,” she added, noting that there are nearly 69,000 cardholders among 99,000 residents.

Another committee weighs in
An ad-hoc committee formed to consider the library issue also supports Option A, though it acknowledged that another option, Option D, could be chosen, with layoffs of 3.6 librarians, including both children’s librarians, to save more in a reserve fund, but no outsourcing.

Richard Anderson, vice-mayor of Truckee and a committee member, said there was no interest in the LSSI plan. He said that those looking at LSSI’s bid couldn’t conclude how the company saves money and makes a profit, though “they reduce costs by slashing benefits.”

LSSI, in its proposal, said it will interview all incumbent staff members who want to stay at the library and “will consider all of these employees for employment.” In a cover letter, however, it promised to “interview and hire, at their current salaries, all incumbent staff members who wish to remain with the library system.” 

(Later, LSSI's Frank Pezzanite said the company intended to interview and make job offers to all incumbent library staff members at their current salaries, but couldn't guarantee all of the current employees would apply for jobs or accept job offers.)

According to county labor agreements negotiated in 2007, there would be a 13.4% increase in salaries and benefits over two years, as noted in an FAQ.

The county administrator’s take
County Administrator Haffey told LJ he couldn’t preview his recommendation, which should be available online as of February 19, but said he was dismayed by “the misunderstanding of what we were trying to do,” ultimately, “to preserve library services.”

He noted that the county already contracts out “something as sensitive as mental health therapy.” He said some people had the mistaken idea that privatization meant selling the library collection.

How does LSSI save money? Haffey said the company can offer more flexible scheduling than public employees, that it has more efficient processes, and that, while salary and health benefits are comparable, “the public employee pension system is very, very expensive.” (LSSI offers a 401(k) plan.) Haffey read LSSI’s proposal as considering the hiring of all current employees, not committing to hiring them.

While the county initially sought to reach a resolution in January and implement it in February, the committee process took longer. Now the changes will be implemented April 1, at the beginning of the fourth quarter of the fiscal year.

From the county librarian
Trygg, director for three years, told LJ she couldn’t provide detail on her recommendations, but “my suggestions would not involve using LSSI” but rather involve some cutbacks previously discussed. She noted that department heads have not gotten cost of living increases in two years, and “I’m prepared to cut back my work day” to save money. 

She said that some aspects of the LSSI bid have provoked thoughts about how to streamline library operations, such as outsourcing of cataloging. The library has a cataloger. “We add an awful lot of donations to our collections,” she said. “It’s a very literate community.”

“We are going to be having to make a decision soon about our Horizon SirsiDynix system,” she added, “maybe going to ‘software as a service.’” LSSI said it was “uniquely qualified” to work on a new ILS, given that it manages two other libraries transitioning from Horizon.

The LSSI bid promised a dedicated courier service to move materials and asserted that the volunteers currently performing the task, if in an accident, could pose a significant liability. Trygg said that was incorrect, as the volunteers “are covered by our workers’ compensation.”

Library supporters assert that private management could risk $400,000 of annual volunteer and cash contributions. Last year, more than 200 volunteers worked about 13,000 hours, Trygg said, shelving books, mending them, and running story times. The William and Marian Ghidotti Foundation, which provides an annual stipend to the Friends, this year agreed to raise the sum from $12,000 to $14,000, but only if the library isn’t outsourced.

Fundraising efforts
Beyond the telethon, others have been raising money for the library. In December, Jeff Ackerman, editor/publisher of the Union newspaper, argued against a tax increase for the library, but proposed that cardholders each contribute $5 to narrow the library’s shortfall. “Times are tough, folks,” he wrote. “If we want to keep our library doors open, maybe it's time to take some personal responsibility and not brush it off to those who may not appreciate the libraries as much as we do.”

Three weeks ago, $42,000 had been donated, said Trygg. Additionally, operators of a local theater are raising money by holding classic movie nights, and residents of the community of Penn Valley are raising money to defray costs of renting the library space. Meanwhile, the library is seeking additional literacy grants.

Down to the wire
On February 13, the Union ran an op-ed from Jackson County (OR) Administrator Danny Jordan headlined Other Voices: Public-private library partnership a win-win. He asserted that the reservations expressed by the staff and the public had been assuaged by LSSI’s performance, circulation was way up, and the county had saved more than $20 million over five years compared to what it would have cost the county.

In response, some commentators pointed out that savings had been achieved at the expense of staff, and that “we had a good system, and are better off sticking to what we know works.”

“There’s a lot of public support that hasn’t begun to be tapped,” commented Hall, a member of the Citizens Oversight Committee. “Our community loves libraries enough to really help them out right now.”

While Ackerman praised Haffey for acting prudently in a fiscally conservative county, he wrote in December, “In the end, it will be the five elected supervisors, not Haffey, who will make a final library decision. And I doubt that any elected official who hopes to get re-elected (and two of them recently announced they will be seeking new terms next year) will vote to privatize our public libraries.”