how the next meeting went

In June, I said that I wouldn’t be voting to approve the LITA budget, due to a variety of unaddressed concerns. At Annual, Cindi Blyberg ran an awesome meeting where we put off the vote, to give our Financial Advisory Committee time to update things before the fiscal year close. And then I forgot to update the blog about the subsequent meeting!

Well, the FAC did outstanding work, pulling together a budget that I solidly believe in, on very little notice. (I owe you all beers. A lot of beers. Zoe Stewart-Marshall, Andrew Pace, Susan Sharpless Smith: please be thinking what kind of beverages you like.) We approved it in August with very little fuss. I was pleased to vote for it.

You can have a look yourself if you like: FY2015 budget [.xlsx].

You’ll notice the bottom line here is a deficit. I’m bummed about that, because I’m concerned about LITA’s health, but mostly I’m happy about it, because it’s honest. I think the lines above it are credible estimates of what we’ll end up doing in FY ’15, and I would a million times rather be honest about the challenges of that, so we can plan for them, than sweep them under the rug.

And now the FAC is off and running on the FY ’16 budget, with a timeline that should allow for much more deliberation at leisure than FY ’15 allowed. (Note to self: you owe them even more beers.) And Board is pondering how to fill the holes. Your ideas, as always, are welcome.

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how the meeting went

Last post, I said I wouldn’t be voting to approve the LITA budget. And then I left you all hanging as I went off to Vegas, and recovered from Vegas, and started my to-do list recovering from Vegas…

So, how’d it go?

Short version

Cindi Trainor Blyberg (now LITA past president) is a quiet meeting-running ninja. We have delayed the vote. I’m cautiously optimistic about how things went. We’ll see.

Longer version

We had a remarkably good meeting Saturday of Annual. A solid majority of the Board expressed views frankly and without hard feelings. We didn’t always agree, which I think is a good thing.

We’ve asked the Financial Advisory Committee to do a bit more work before our vote. The fiscal year begins September 1, so there’s a bit of a window for that work, though it’s definitely a time crunch. We’ve also asked them to do work toward a better process for FY2016 and beyond. The ALA budget calendar says boards voting at Annual but divisional budgets are put forward for review in late winter, which means your options are pretty much “rubber stamp”, “last minute panic”, or “go beyond the calendar to ensure a consultative process by Midwinter”, and really only one of these options is any good, so I think we’ll be working toward it.

I’m glad we delayed the vote to allow time for some issues to be addressed and I hope that, when we do meet next (time TBD), we’ll have something I can feel comfortable voting for.

Obviously there’s a lot of loose ends here. What exactly can we get done in time? How fluidly can ALA roll with late-breaking changes? I’ve asked a lot of people, gotten a lot of answers, and won’t know which ones are right until at least September — that’s the caution in my optimism.

Feeling fairly confident about FY2016, though. And really hoping that as I face FY2017, the last budget I’ll face in my Board term, that I’ll be saying what’s past is prologue, and the budget is a fluid and strategic tool we’re using to advance our goals and yours, howsoever they change. And be super excited to vote for it.

Why I won’t be voting to approve the LITA budget

Not every board member can be a financial wizard. Every board member, however, needs to be a financial inquisitor.

101 Board Basics: Fiduciary Responsibilities, BoardSource

I ran for LITA Board on a platform of inclusivity, transparency, and financial stewardship. That means I consider it my sacred trust to you, the members, to understand LITA’s financial status and sustainability; to advocate for directions that support its ability to serve you for years to come; and to communicate with you about the decisions I make in representing you.

The fiscal year 2015 budget [PDF] has been presented to the Board and I will not be voting to approve it this weekend. Here’s why.

Unanswered questions

First, the budget presents too many unanswered questions.

It does not attribute revenues and expenses to program lines, which makes it prohibitively difficult to tell whether our allocations support our strategic vision, and to monitor the status of our programs.

It quotes fiscal year 2013’s actual dues revenue as our expected dues revenue for fiscal year 2015, but this is not supportable in light of our decreasing membership trend; this dues revenue projection is overstated by approximately $20,000.

Its revenue for registration fees (a new line in this year’s budget) appears to be based on our fiscal year 2014 estimated dues revenue for the sum of Forum, web courses, webinars, preconferences, midwinter workshops, and regional institutes. However, we have not run regional institutes since 2007 and have no immediate plans to do so, and budget estimates for online education have consistently exceeded actual revenue by tens of thousands of dollars. This line is given as $234,200, but actual realized revenue for fiscal years 2011 through (projecting from year-to-date) 2014 has been between $180,000 and $190,000. Therefore this line overstates revenue by roughly $50,000.

The expenses are reported in a new format, with categories that cross-cut previous categories; therefore I cannot confidently judge whether they are accurate. (Over the past four years our expense lines have also been overestimates, usually working out to net operating deficits in the $20K range, but with large year-to-year variance.) I also cannot tell how much support we intend to give to our programs, and if that is in line with what we require.

I asked some of these questions about a previous draft of the budget at Midwinter. (And more; my unanswered-questions list is far too long to fit in either a blog post or a Board meeting.) I have not found that either Midwinter, or this new draft, have answered those questions.

The bottom line: this budget overstates our revenue by around $70,000 and makes the accuracy and relevance of our expenses impossible to analyze.

What budgets are for

Second, this budget is not an instrument for communicating or enacting LITA’s strategic goals.

Because it neither disaggregates revenues nor attributes expenses to program lines, we cannot communicate clearly with our committees and interest groups how their work fits into the big picture, what LITA needs of them, and how we will support them.

Because it does not change — it reflects programs we no longer run and revenues we no longer realize, and does not reallocate money or staff time to new programs — we cannot change. We know that — particularly as a technology association — we operate in a competitive landscape that is radically different than it was ten, even five, years ago. We know, from our membership declines (shared by ALA and many associations) and the thoughtful reporting of our Financial Strategies Task Force, that we must do a better job of articulating our vision and providing value.

We have no shortage of vision, but all our strategic planning is meaningless if we cannot operationalize it.

The budget is a prologue to the real story, which is how we serve you. Let’s set the scene correctly.

Where I stand

I am persuaded that, if I were to approve this budget, I would be failing in my duty of care toward the association, and (more importantly) my duty as a representative of the membership: elected by you, holding the trust of three thousand members carefully in my hands.

Duty of care is an obligation I submitted myself to when I accepted the nomination, but your trust? That doesn’t feel like obligation; that feels like reverence.

We can and must do better by you.

I will not be voting to approve this budget. I ask the rest of the Board to join me.


Update, 10 July 2014: how the meeting went.

serials subscription economics: or, monopolies, italics, and cannibalism

So the husband and I were talking yesterday about the new EBSCO monopoly on certain periodicals, after I read Dorothea Salo’s post on the matter (now BoingBoinged). And he was wondering, so really, what’s the issue here? What’s the appeal of these database vendors? And a BoingBoing commenter wonders, “the content providers have decided to sell their content through only one vendor…is that not their right?”

Salo addresses some of this in a follow-up post, but I want to as well — a scattershot Things What Might Not Be Apparent If You Are Not A Librarian post.

* One of the intriguing aspects of getting your journal access electronically is that it’s more like renting than owning. Different vendors may have rights to different date ranges of the back issues, and you may have any number of contractual limitations on your database access, and if you stop having a contract with a vendor, then no, you might not have access to the back issues you had access to yesterday. It’s not like a print collection, where you paid to buy the physical thing — and it came with limitations, like lack of fulltext search and the need for ever-increasing shelf space to store — but you *have* the thing until it falls to pieces, anyway, even if you cancel the subscription. You stop leasing your database access, you no longer have back issues. Now, maybe you get them through another vendor — if you have contracts with multiple vendors, and publishers have contracts with multiple vendors, then you may still have access through other means, albeit not necessarily to the same range of back issues or through the same interface or with the same features.

* But maybe you don’t have access through another vendor, and that’s the issue with the current EBSCO deal. If you want to have access to certain publications, you have to deal with EBSCO. And this connects with two other issues:

1) EBSCO, as a monopoly power, can set forth whatever crazy terms it wants. (“But if they’re too crazy you can just refuse,” I hear you saying. Yes, but see below.) For instance, maybe you just want to read Time, but they will only sell you Time in a package deal containing dozens of other titles such Injury and Abdominal Imaging and The Lady’s Magazine or Polite Companion for the Fair Sex and you really, honestly, do not care about these publications (all real EBSCO titles fyi), but you have to pay for them if you want Time.

2) Now replace Time with, say, Science or Nature or whatever the incredibly critical journal is that your patrons absolutely cannot live without. The current EBSCO monopoly is over popular press magazines, and I imagine it will be incredibly irritating to public libraries who can no longer afford (see below) to stock them, but if you are a university and your library cannot afford to stock the marquee journals for your top academic programs, this goes way beyond “irritating”. So take the current EBSCO deal as a harbinger of things to come, and you see why it’s worth setting up some barricades.

* I owe you one more “see below”, and that’s cost. Serials are very expensive. People have been cancelling print subscriptions to make way for them, sure, but they’ve also been scaling back their monograph acquisitions just to keep up with serials. Serials prices have escalated enormously and library budgets, well, haven’t. MIT spends seven million a year on serials — yes, they’re big, and yes, as a nearly-all-science institution they depend unusually heavily on them — but this should give you a sense of the absurdly large chunks of change involved.

The thing that should make this — from your perspective, from a patron perspective, not just a librarian perspective — a problem, the thing that should make this more than something to brush off as businesses-doing-business — is that monopoly power over access to key periodicals takes away a major chunk of libraries’ negotiating power, when their institutional contexts may not allow them not to say no to those periodicals, and when serials budgets are already cannibalizing everything in their path. What you will see, as a patron, is non-serials acquisitions and services being cut merely to maintain the status quo of subscriptions. And if that is not something you like, librarians are going to need to know that their institutions will back them up if they need to take scorched-earth negotiating positions with vendors.

Thing-ology on the library ebook market

Thing-ology has an interesting post on the economics of ebooks in libraries. They argue, essentially, that libraries need site-licensed copies of ebooks rather than ones tied to specific physical devices; this will split the library and direct-to-consumer ebook markets and allow for runaway rental/licensing costs for library ebooks. There’s an apt comparison to runaway journal costs for academic libraries.

I think this argument has a lot of merit to it (although I do think the markets aren’t entirely split, and the existence of the consumer market puts a cap on the licensed market; your site license for 25 simultaneous uses can’t cost much more than 25 direct-to-consumer, device-linked copies before buyers start fleeing). It also reminds me of the horrible angst that is the textbook market — it points out that for many books prices are held down because used books compete with new, and this downward pressure stops holding in a rental-based model, because there is no secondary market. There is, of course, a thriving market in used textbooks, but one which publishers vigorously combat via incompatible new editions, included software, and (soon and increasingly, I’m sure) digital textbooks on a rental model — just like the ebooks picture Thing-ology paints for the library.