Santa Clarita Library Opens Its Doors to LSSI as Toronto Gears Up for an Outsourcing Fight
By Michael Kelley Jul 26, 2011A long battle over control of the Santa Clarita Public Library in California reached its final chapter earlier this month as Library Systems & Services, LLC (LSSI), a private company based in Maryland, took over management of the three-branch system.
At the same time, proposals to sharply cut funding and reduce the footprint of Toronto Public Library's 99-branch system have raised concerns among union members and author Margaret Atwood that the city might strike an outsourcing deal with LSSI, even though there has not yet been any discussion with the company.
"It's really a great story," Brad King, LSSI's chief executive officer since April, said about Santa Clarita. "There was a lot of drama over the last year and a half around this, and I think a lot of the wonderful news has gotten overwhelmed by some of the other things that have happened," he said.
As for Toronto, "We have not had any talks with Toronto officials. I think they are working a broader outsourcing agenda-so, I expect we'll just keep an eye on developments there," he said.
Outsourcing agenda in Toronto
Toronto has a $170 million operating budget for FY11, but the city is proposing cutting $17 million for FY12 (which begins in January) and is also planning to merge the system's Urban Affairs branch into the Toronto Reference Library.
In addition, Toronto hired KPMG to conduct a citywide "core services review," which concluded that the city should "consider rationalizing the footprint of libraries" and close some branches, as well as reduce library outreach and programming in order to save $13.3 million. The city paid KPMG $350,000 for the review.
Although KPMG does not mention outsourcing library services, the Library Workers Union Local 4948, which represents 2400 library workers, has posted on its Project Rescue website a comment made in February by city councilor Doug Ford (the brother of Mayor Rob Ford) that, "We're going to be outsourcing everything that is not nailed down."
"The TPL is a target of this Core Services Review, a process with the goal of privatizing or shutting down municipal services," the union said on the site, specifically mentioning LSSI. "Following the lead of several American cities, we are likely to see our City Council privatize some or all of the TPL's operations, unless we act to change this outcome."
The union has an online petition to stop the proposed cutbacks and any move to outsource, which Margaret Atwood tweeted about July 22, providing a link to the petition; the union's server crashed temporarily as a result . The petition had 22,140 signatures at noon Monday.
The library board will discuss the KPMG proposal today, and the city's Executive Committee will do the same on Thursday.
Santa Clarita a done deal
Meanwhile, in Santa Clarita, the outsourcing is a done deal. The city pays LSSI $3.9 million for each year of the five-year contract, and the city's total expenditure on library services for FY12 will be $4.2 million--a million dollars less than the $5.2 million operating budget in FY10 under the County of Los Angeles Public Library (the last year of full normal operations under the county).
The Santa Clarita City Council voted August 24, 2010, to withdraw from the county system and establish city control of the library system. Unlike many other contracts that LSSI has won, the Santa Clarita system was not experiencing financial difficulties.
The decision met sharp opposition, including lawsuits. It has helped spur a bill in the state legislature, AB438, to impose more regulation of outsourcing, and it also was part of a presentation at the recent American Library Association annual conference in New Orleans.
The number of professional librarians at Santa Clarita has been reduced from 14 to nine. Overall, LSSI has budgeted for 59 positions, or about 48-50 FTEs for the three branches, compared to the 99 positions that the county had budgeted for in FY10, or about 60 FTEs (although all positions were not necessarily filled at all times).
Only 23 staff members made the transition to LSSI and no degreed librarians who worked in Santa Clarita under the county applied for positions at the LSSI-run facility. However, two or three degreed librarians from other LA county library branches did go to work in Santa Clarita.
Tom Cornicelli, an adult and teen service librarian at La Verne Public Library, CA, worked at Santa Clarita for three years and did not apply to LSSI.
"When push comes to shove, they are going to maintain their profit margin, and it will come at the cost to the public eventually," he said. "Ideologically, I became a librarian to help people, and I don't see the opportunity there when cost is the bottom line. They dropped MLS staffing so it seemed a contradiction that they are going to provide the same level of service to the public," he said.
The new city librarian, Ed Kieczykowski, who was county librarian for San Bernardino County from 1994 to 2011, said he had no concern that LSSI was diluting the expertise of the staff or the level of service.
"I'd put the staff against any other similar sized library out there," he said. Kieczykowski also said that LSSI's operations were more streamlined and economical.
"It used to take me four months to hire a library page. For me, it's now a much more fluid situation. If I need to hire someone or purchase materials I can go out and do it and move much faster than any government entity can do. It's a whole lot easier to get things done," he said.
The library workforce is no longer represented by a union. Previously, under the county, 73 full and part-time employees belonged to Service Employees International Union Local 721. The union would have to reorganize the workplace if it wanted to again represent workers there, according to Favel Jens, Local 721's political coordinator.
Despite the budget reduction, LSSI has expanded hours of service, from 165 under the county to 189, a 14.5 percent increase. The new schedule will restore Sunday hours at the Valencia and Newhall branches. The materials budget is also increasing, from $444,000 under the county (FY10) to $750,000. The city also has made a one-time expenditure of $900,000 on materials for the opening of the new system.
The Santa Clarita City Council also voted to join the Inland Library Network, a collaboration of eight independent library systems totaling 76 branches, allowing over one million titles to be available to Santa Clarita patrons.
Ebook availability is more constrained under the new system. A search of the OverDrive sites for the county and the Santa Clarita systems shows that the county offers its patrons 3,609 fiction and nonfiction ebooks, while Santa Clarita offers only 1,076.
Salary, other benefits at issue
More importantly, there is abiding concern in the profession that the economies and benefits that may come from outsourcing frequently lack transparency and come at the expense of accountability and staff benefits. A summary of LSSI benefits (provided by Local 721) offered to employees at the Camarillo Public Library is shown below. The county's health benefits are listed here.
LSSI does have to provide monthly, quarterly, and annual financial statements to Santa Clarita, but when asked to disclose salaries, for example, the company declined to release any information.
"It just opens up a can of worms that we don't want to open up," King said, citing competitive reasons.
The county released a complete salary and employee benefits cost reference table, which showed $111,466 for a Librarian V to a $12,503 salary for a part-time page. The range for professional librarians was $89,712 for a librarian I up to the librarian V step.
"Our libraries compare favorably with those offered by the LA county system," said Mia Pezzanite, an LSSI spokesperson.
Patricia A. Tumulty, the chair of ALA's Committee on Library Advocacy and Task Force on Privatization, said the ALA Council adopted a policy in 2001 against deals like the one in Santa Clarita, and at the ALA conference in June the organization published a checklist for communities to consult when considering outsourcing and/or privatization of library services.
Tumulty said ALA was concerned, even though LSSI must make reports to the city manager and the city has a right to demand an audit, that the library director is an employee of LSSI, and not employed by a public entity. She also said LSSI should make public its salary figures.
"Certainly, our feeling is that if it is a public service funded by public dollars that information should be available. Salary figures for all public entities need to be available," she said.
The bill before the California legislature would require that "the contractor's wages are at the industry's level and do not undercut city or library district pay rates." It also would prohibit savings arising solely "from lower contractor pay rates or benefits," and the contract cannot cause "the displacement of city or library district employees," which would include layoff, demotions, or involuntary transfers.
"We're on record opposing that bill because we feel it makes it more difficult for cities to access an option in how they want to go about operating their libraries which they really need in the current environment," King said.
A December survey by Library Research Service (LRS), a unit of the Colorado State Library, showed that 82 percent of the 2,509 respondents from the librarian community thought that privatization would have a negative impact on library staff's job security and benefits or retirement plans. Sixty-six percent said it would hurt the job prospects for degreed librarians. Seventy-five percent of the respondents said that a library managed by the public sector was more likely to employ qualified staff.
Consolidating back office operations, such as collection development or payroll, is LSSI's single biggest source of savings, which is complemented by sharing resources across the organization, King said.
Heather Hill, an assistant professor at the University of Western Ontario, has written a dissertation on outsourcing of public library services and also was a presenter at the ALA session in New Orleans.
"The lack of transparency-that is a significant concern. As a private company there is much less information available on where LSSI's profit margins are coming from," she said.
Hill said ALA itself was guilty of a little lack of transparency during her presentation. ALA obliged her to black out all references to LSSI and the name of cities in her Powerpoint slides on the history of public library outsourcing, she said.
"It was all just so strange because most of the people in the room knew what company we were talking about and knew at least some of the cities involved. About a third to half the audience were LSSI employees," she said.
Marci Merola, the director of ALA's Office for Library Advocacy, said the organization's legal counsel said there were defamation and antitrust issues to contend with.
"Our legal counsel advised us not to use the names of any specific companies, to name any particular library, or to call for a boycott," she said.
Hill said her biggest concern about LSSI was the lack of a competitive market.
"Currently, LSSI has a monopoly on public library management contracts. There are no other players in the market. When a library comes up for contracting, usually there are only two bidders-LSSI and the public staff who are currently running the library," she said.
Lorie Christian and Lori Rivas were also a part of the panel with Hill. The two Santa Clarita residents, whose expenses were paid for by Local 721, said the city did not include enough public discussion before voting to hire LSSI.
"I hope to make other communities aware of how a private company can come in under the radar and work with city management and transform a whole public service without community input," Rivas told the Santa Clarita Valley Signal.
King said that as long as the city gets better value for its money and the level of service meets the community's demands, then how LSSI achieves that outcome should not be a primary concern.
"As long as they get that, our clients are generally happy," he said. "It's a fixed contract for a level of service, and we deliver that service," King said.
On July 12, the City Council approved the Strategic Service Plan for the Santa Clarita Public Library, which has numerous goals for FY11-14 that LSSI will be responsible for implementing, although some goal numbers are left blank.
