Finance, Budget, and Management for Reference Services

Ruth A. Fraley, Bill Katz, Ruth A. Fraley, Bill Katz

• Publisher: Routledge
• Year: 2019
• Print ISBN: 9780367374280
• eBook ISBN: 9781000757729
• Topic: Business
• Subtopic: Finance
• Index: Business

The library budget, a topic of primary importance to the reference librarian, is thoroughly examined in this book, first published in 1988. Experts offer insightful suggestions for reference librarians to understand and take responsibility for budget issues, directly and indirectly. They address the ability to explain the budget - which actually entails explaining the collection, the services, and the process in place for managing the fiscal resources - a necessary skill for any reference librarian faced with looming budget cuts. Providing quality services on a limited budget is also explored. The contributors provide helpful essays on convincing the parent agency to provide adequate support, setting goals and priorities, generating revenue, and more.

SOME SPECIFIC SITUATIONS INCLUDING REVENUE GENERATION

To Charge or Not to Charge: No Longer a Question?

Sally F. Williams

SUMMARY. In the last ten years, charging fees for Library Services has become a widespread practice. The trend to charge for library services will continue because libraries face escalating costs with limited resources. Many libraries have added fees without reviewing existing fees for consistency and appropriateness. Reference librarians and financial administrators should review financial policies of public services with the goal of establishing fee structures to provide optimal funding for services that are changing rapidly. This article suggests a framework and philosophy for doing so.

It is ten years since American Library Association (ALA) stated in its ALA Policy Manual, Positions and Public Policy Statements, paragraph 50.4 “that the charging of fees and levies for information services, including those services utilizing the latest information technology is discriminatory in publicly supported institutions providing library and information service.”

Sally F. Williams is Associate Librarian for Financial Affairs, Harvard College Library, Cambridge, MA 02138.

The issue hotly debated in the early years of this decade centered largely on whether or not libraries should charge for library services. Charging fees was a particularly sensitive issue for publicly supported institutions, less so for privately supported libraries. Although libraries impose a variety of charges to users, the service most frequently contested as a legitimate candidate for fees was computer-based literature searching. In the latter part of this decade, however, the attention of the published literature has been focused less on the theory of whether or not to charge for services, and more on management of fees issues such as the scope of services eligible for fees and the mechanics of fee-based services. Charging fees is a commonly accepted practice today. Lynch¹ found that while 72% of all types of libraries surveyed charged fees for services, 86% of academic libraries did so. Mckinney and Mosby² found 84% of academic libraries that offered on-line database searching as a service charged a fee. Watson³ reported only one research library not charging for database searching.

There are several reasons for this change in attitude and practice. The most obvious factor is financial. Libraries experienced significant cost increases. Prices for goods that traditional libraries purchase, particularly books and serials, increased at a much higher rate than general consumer goods. Programs that libraries have undertaken, particularly automation, have required large expenditures. At the same time, however, library budgets were shrinking or, at best, not increasing at a rate commensurate with program needs. More and more libraries seemed to have decided that charging fees was the easiest if not the only option for maintaining existing services or introducing new services that were expected to be used by relatively few of the potential library users without unduly compromising the support of traditional library services used by the majority.

The second factor was technology. New technology brought new library services and user needs and it also made it easier to identify some of the costs so that these could be charged back to users. A third factor was increasing demand. Receiving information is increasingly important to users but getting it is increasingly difficult. More and more users seemed willing to pay for the services of an intermediary expert at retrieving quickly the right information.

Will this trend continue? Yes. Has the controversy ended? No. Most libraries will continue to face the prospect of increasing costs and limited resources. The financial need to develop alternatives to traditional sources of funding will encourage the trend to charge for services. Simultaneously advances in technology will likely require radical changes to the services demanded, the type and number of users and the existing mechanisms for charging. For example the trend toward increasing use of microcomputers for remote access to databases, hastened by advances in local area networking, direct access to data, CD ROM possibilities and relatively inexpensive hardware/software will force a change in database searching services needed and the type of clients demanding new services. As more vendors produce user-friendly interfaces, more users will become end users who may need to rely on librarians less for actual searching and more for advice on which database is best searched and how. Librarians will probably be spending more time with each user, but unless fee structures are changed, income is likely to decline. Should users continue to be charged in the same old manner? Should the library extend services? As technology evolves, existing services become inappropriate, clientele changes, present methods of charging fees no longer serve well the original purpose. In short the perennial question of who should pay and for what will not go away and is likely to return with renewed emotion and challenge as libraries make the transition from emphasizing ownership of materials toward emphasizing access to information.

While librarians urge the issues to be addressed at higher and higher levels, library life goes on. Budget deadlines must be faced. Impatient patrons must be made to comprehend and sympathize with library policies that appear unfathomable.

What can reference librarians who must implement policies and convert lofty ideals into workable practice and realistic dollar amounts do? In the short-term perhaps the most useful task that practicing reference librarians can perform with financial administrators is to review the library’s public services from a cost/ benefit viewpoint.

Many libraries have not reviewed systematically their policy and practice of charging services. If new charges are levied but existing charges not adjusted a library may end up with a hodgepodge of fees for a variety of services to a variety of clientele at a variety of prices, possibly contradictory and no longer serving the original purpose which should be to provide adequate funding to ensure steady and reliable delivery of services. In addition to financial considerations this situation can be harmful to the library if confusion over fees leads to alienation of users or staff or administration.

Public services staff should be involved in any review of services and their financial implications. Public service staff know more about user needs, expectations and opinions of library practice than other library staff members. Reference librarians in particular develop an intimate knowledge of the library that is rarely achieved by administrators. On the other hand, public services staff members may not be aware of the costs of delivering public services or the broader economic and political environment of the library as a whole. When the two are brought together there can emerge a carefully considered financial philosophy of public service that should lead to stable funding of services even in the face of limited and erratic library resources. The mutual goal and joint responsibility is to optimize the value given as well as received.

The purpose of this article is to suggest a framework in which reference librarians and administrators can review the services provided for appropriateness of fees and the amount charged to each category of user.

Appendix A contains a list of services libraries generally offer, many of which are performed in reference departments, to aid in identifying services offered in a particular library. Appendix B is a list of services commonly charged in libraries. The library should inventory the services it offers, then evaluate using the following guidelines to decide which services might be charged and the extent of cost to recover. The next step is to classify users as primary, secondary, tertiary, etc., and determine what level of fee is appropriate to the category. It is suggested that the final product be a matrix made for each service showing each classified type of user and suggested level of fee, if any.

SERVICES ELIGIBLE FOR FEES

1. Services in which the benefits to users are private rather than collective in the economic sense. Private benefits accrue to a single individual and do not accrue to the public at large. Services with collective benefits are those which cannot be separated and withheld from those who do not pay directly. All primary members ought to receive collective benefit services since members have already paid for them in the form of taxes, student tuition, institutional budget support, membership dues, or the like. Examples of services whose benefits are clearly private are highly specialized or expedited services. Ideally, but not necessarily, the user also has a choice between using a library service which may take more time or be less complete which is offered at no extra charge or using a fee-based service for faster or more extensive service.

2. Services which will be used by few rather than many.

3. Services whose demand is elastic rather than inelastic in the economic sense so that fees will serve the function of efficient allocation of library resources. Users who pay will in theory not pay for services perceived to be unneeded or of poor quality.

4. Services for which nonpayers can easily be excluded. Fees should not be paid by those who do not use the service, and those who do not pay should not be able to use the service.

5. Services that could not be offered without diverting significant resources from services offering collective benefits.

6. Services whose expenses could easily outstrip a library’s ability to pay. Unlimited free database searches is an example that comes readily to mind.

7. Services where management information can be collected and evaluated periodically in order to ensure appropriate quality and level of service. Management control is needed to ensure the success of the service by monitoring quality. People who pay for services weigh value of service delivered against cost. Since they will not purchase services that are inferior, the library will not have received good value for its capital investment (equipment, supplies, documentation, training, promotion in the case of online database searching) if the service performed is not of appropriate quality. Then, too, management control is needed to ensure an appropriate balance among services offered. Services offering collective benefits should not be made to suffer merely because of demands for private services from those who are willing and able to pay extra. Libraries should set up periodic formal review to evaluate existing services. Doing this quarterly is not too frequent in this era of rapidly changing technology. Libraries could also use the opportunity of this review to discover new services to offer.

8. Services whose growth could continue to be largely supported by fees independent of regular budget support. Admittedly it is difficult to predict the future but a library should not undertake on a fee basis a service that is certain to require infusions from a regular library budget that by definition is already inadequate. One of the prerequisites for a successful service is that it be reliable. Services that are withdrawn and reoffered frequently cannot be perceived as reliable by users and they will seek alternative service elsewhere.

9. Services which are especially time consuming, disruptive or otherwise difficult to perform. Examples are rush service, preparing lectures and exhibitions.

10. Services in which library responsiveness is particularly desired. Nielsen⁴ found “that in the libraries where fee charging was established policy, the librarians were more responsive to their on-line search service clients, as measured by three of the responsiveness variables.” But Nielsen also warns that “although librarians who work in situations where a fee is involved are likely to be more responsive to fee paying clients, they are actually less responsive to the totality of service demands in the workplace.”

11. Services with high hidden costs and high opportunity costs. Hidden costs come to light from the ripple effect. A hidden cost of purchasing a lower priced but poor quality database is the increased staff time or other resources needed to correct errors or complete gaps in the information retrieved for users. Another example is the increased demand for purchase of library materials not owned or interlibrary borrowing that may result from increasing user access to bibliographic citations. Opportunity costs are the sacrifices made by selecting one alternative over another. What might staff be doing if not occupied with X service for Y user? What other income is sacrificed because fees for X service are levied? Hidden costs and opportunity cost...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Contents
• Now That We Are Talking About the Budget
• The Processes, Procedures and Conundrums of Reference Budgets
• Some Specific Situations Including Revenue Generation
• Managing The Resources