Dear City Council and Staff,
As you ponder whether you want to take over our local libraries from LA County and instead hire a private contractor, I have just three questions:
- I would like to visit a few libraries that have converted from LA County to the privatized model. Can you share a few examples?
- I am one of the 70,000 residents that lives in SCV but is outside the City of Santa Clarita. What would it cost me to access library services in this new paradigm?
- At what profit margin would the private contractor operate their business? Isn’t this the amount which would add zero value to the City and its residents?
Thank you for your prompt replies.
Sincerely,
Dubious in Valencia
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ND:
First two questions are valid but the third is not. A private enterprise must be compensated for the capital it deploys to run the business through a profit margin.
HOWEVER, since this is effectively a franchise monopoly (at least over a period of years) the City would try some vein attempt to monitor profits like they did with Blue Barrel which ended in abysmal failure.
Tim:
The contractor’s profit margin is the premium we’re paying for having them run the thing.
The central argument against LA County is that we pay X, we get X-Y.
Explain how this is any different?
Yes, but…..
All of this assumes that the cost numbers have any meaning other than directionally. (The only numbers that can actually be proven are revenues.) They way Darren Hernandez’s argument works is as follows. The City collects $2.2 million in library fees and can pay this outsourcing firm to run the libary for $1.7 million. The excess $500K will be used to buy a bunch more copies of the Sisterhood of the Travelling Pants trilogy and every Nicholas sparks novel known to humankind, I guess.
Of course, we won’t really be getting the same service (the interlibrary lending system won’t work in real life and the “librarians” will be $11 an hour folks to help old people work the checkout machinery), but the Canyon Country branch will be open on Sunday).
However, do we need to count the comedy gold when local cranks figure out the libraries are locally controlled? It is only a matter of time before some crank shows up to try to get Harry Potter and The Wizard of Oz removed from the shelf, not to mention Huck Finn from another flavor of crank!
“Of course, we won’t really be getting the same service (the interlibrary lending system won’t work in real life and the “librarians” will be $11 an hour folks to help old people work the checkout machinery), but the Canyon Country branch will be open on Sunday).”
Love it!
If the contractor runs at a 30% margin, that $1.7M is actually $1.2M worth of services + $500k profit. Again, we’d be paying X and receiving X-Y.
I think there would be more support if the City ran the library rather than an outside firm.
Running a library is more nuanced and subjective than, say, the bus system. The City contract with MVTransit can be measured with objective data for quality of service.
Boooo!! I think the City trying to build a library management infrastructure from scratch would be about the silliest thing ever. It would never be as good as what we have now since those management costs are being spread over a lot more libraries.
Many City leaders reference Burbank as the model we’d like to emulate. We have 170k people in our City, much larger than Burbank’s 107k.
Burbank runs their own library system. Why can’t we run ours?
Question #3 is connected with Question #1. Show me.
Libraries are going to be a dying breed. Note that Barnes & Noble are going up for sell as book sells are dropping because of the IPad and Kindle.
I didn’t realize libraries were in the business of selling books?
Borrowing and not paying for books is going out of style apparently.
Why should any company make a profit off a public library? If there’s any “profit” it should go directly back into the system. Just like County is doing now.
Regarding three questions:
At present there are no former LA County libraries that are privatized. The City of
Calabasas,population 23, 700 did contract with LSSI when they left county service in the late 1990′s but has since terminated LSSI and hired city staff to run the operation.
LSSI is a private company and therefore is not required to reveal any financial information regarding their business.
If the City leaves county library service, the City has the right to prevent anyone who lives outside the city use of the city’s libraries or the City can charge nonresident fees. However, if they join the cooperative library system SCLC they must allow nonresidents to borrow materials free of charge. It appears that under State law however, the City could charge nonresidents for any service other than borrowing including interlibrary loan fees, children programs, internet use etc.
And if the City joins SCLC then the COUNTY must allow CITY residents to borrow COUNTY materials free of charge. Ha! So people like my hero TIM MYERS (really, I love your arch wit, Tim) could still use his County Library card to select items from the County Library’s “robust” collection of books, etc, and pick them up in Castaic (but not when it’s closed on Sunday) or San Fernando (but not when it’s closed on Monday, Friday or Sunday).
And while you say the City could charge non-residents for any service other than borrowing including interlibrary loans fees, you don’t mention that the County Library charges everyone $3.00 for interlibrary loans. And also what you also don’t say is that the City could choose to NOT charge these fees. It’s really not professional of you to keep imply the City will try to screw non-City residents when it’s you who hasn’t built a library for Stevenson Ranch /Westridge. Let’s be honest: the reason your shorts are in a knot is because you’re distraught about being dumped by your cash cow.
RemStar:
Thanks for the love but I want to still get all of my stuff (mainly books on CD) ordered off the internet from anywhere in the system and picked up at the Valencia branch. It is in fact all about ME!
It’s worth noting a few things about privatization of public services.
First, it can work tremendously well, improving quality and reducing costs. The primary problem with government produced services is the lack of competition, which allows them to operate inefficiently. Many municipalities have found that outsourcing garbage collection, streetlight maintenance, school lunch services, etc., has saved the public money with either no loss of, or even an increase in, quality.
Second, whether it works well in a particular case depends largely on how well the municipality (or state) designs the contract. Municipalities that simply outsourced to the first bidder often regret it. Municipalities that shop around and get the best deal, paying careful attention to the aspects that matter to the public, usually do well.
In the case of SCV’s library, I’d say that privatization is neither good nor bad in the abstract. It all depends on the details of any potential deal.
The one detail I’d set aside as unimportant is the status and compensation of the current librarians. Having to take a serious pay cut or having to accept a job at an LA County Library branch far away would be crappy for them, no doubt, but they’re not the issue–the people of Santa Clarita are the issue. The library and librarians are there to serve them; they’re not there to serve the librarians.
I’d also set aside the issue of whether people in the SCV but outside Santa Clarita could use the library. Admittedly, they’re stuck and it would be a completely unfair situation for them, since as county residents they currently can use the library. But this is a municipal issue, so the desires of non-municipal residents should be given only secondary consideration. (On the other hand, the L.A. County Library should be looking out for those people’s interests in any transition, and it would be legitimate for them to demand, as a condition for transfer, that County SCV residents be granted used.)
The issue of expanded library hours is important. That’s a benefit. If benefits can be gained, they should be sought. But ultimately that will depend on what kind of deal the city can swing. So, upfront, it probably can’t be guaranteed.
The issue of interlibrary loan is also very important. The city should not move forward unless they can assure access to this, whether through the County system or through other resources–perhaps the other libraries the company runs. The source of the loaner books doesn’t really matter–it’s the access to a good supply of books that aren’t on local shelves that matter.
If those issues are resolved satisfactorily, there’d probably be little problem with privatizing. But what concerns me is that from reading this blog–which is all the info I have on this issue–it looks as though the city has already glommed onto a potential operator without considering a bid process or thinking through what benefits they need to insist on having. That sounds to me like they’re probably approaching this the wrong way.
And doing it right matters because “The Man” is wrong. Libraries are not dying out. See, for example, here, and here. It’s popular to think that the internet is making libraries obsolete, but many people go to the library to use the internet, people still like to check out books and videos, and libraries put on many programs for the public.
“The primary problem with government produced services is the lack of competition, ”
Once a business locks down a library contract what stops the service from declining? Who are they competing against?
Hoosier:
I have a feeling that LSSI is probably the only company that does this library outsourcing, and they rely on an effective franchise monopoly to make their money.
The main problem is that we now have a system that works VERY well and the new system is never going to work as well in real life because of lack of scale. I am generally pro local control but this whole idea is a big FAIL!
Did it ever occur to you that the Santa Clarita librarians LIVE in this valley? And they CHOOSE to serve us, instead of working in a more lucrative academic library? I’m not a librarian, and neither is my wife. I just know some good ones.
What bothers us is LSSI’s reliance on cheap help and volunteers. Can anybody tell me why anyone would want to volunteer in a for-profit company, especially when the company just pockets the profits? And why should there be a profit coming from a PUBLIC library? Sort of like hospitals making profits: it’s morally wrong. People should have free access to information, not what a profiteer wants to put on the shelves because they got it in bulk cheap. We order ALL the books we read. So do we end up having to pay to use our tax supported library? We NEED free access to the County catalog.
We don’t care about a few more open hours; what point is there when they don’t have what we want? Some local home centers are open till 11 pm; but try to go in and get paint mixed at 10:30. You have to hunt down an employee, and hope it’s the right one who was trained on the paint machine. LSSI will have a low paid person hanging around to turn the lights off. No real service, no real librarian to help. County already has everything in place we need. They do a great job
Sounds like LSSI has bent Laurie Enders ear and she’s marching off the cliff. If the City wants to go this route, they need to open the management up to more than just LSSI! Outsourcing (essentially what this is) is often sold as a panacea but as anyone whose tried to get adequate phone support out of India knows it does not always work too well from a service standpoint. All too often, you get what you pay for.
I think LSSI is the only company that manages libraries. How convenient; they tell you what you need and–surprise–they can supply it. Only we’ll never know how much profit is built in, as they don’t make their profits public. And we get ripped off.
While I am for the City taking over the libraries here I still have concerns. The main one being NDs plight as a non-resident. The City, of course, hasn’t said whether non-city residents will have to begin paying for the services they now get for free and I would hope that would remain the case. If the City takes on the operation of the libraries it would just add more people to the benefit trough. That is what is killing our state already. We end up with more people drawing paychecks for not working than those who are actually working for them. Let the private companies take care of that.
Private companies that have no competition and are awarded exclusive contracts — is that capitalism?
What objective measurements do we set for a library to determine if they are doing a “good job?” Isn’t there are very strong subjective component?
And since there are no other firms that can do this at scale, how do you hold the vendor accountable? How is that “local control?”
The fact is LSSI’s sweet spot is in circumstances where the library is in danger of closing. ie “Something is better than nothing.” That’s not exactly the bar we’re looking for in an operating entity.
Beyond a doubt, I’m convinced that outsourcing operations to LSSI is a dreadful idea.
But, in the long term, I would like to see a strong, imaginative, locally controlled library system. I’m not opposed to starting that process now, provided there is some indication that we are doing it the right way.
By openly, and defensively entertaining the option of outsourcing to LSSI, the City has me concerned in two important ways. First, I’m concerned that they might outsource. Second, and maybe just as important, the contemplation of outsourcing and the over-emphasis on operating hours indicates to me that the City is short on imagination when it comes to libraries. I don’t think I want these people running our libraries, either.
Libraries are struggling to find a new place in this world, and to remain relevant, it’s going to take some great, new ideas. When I first heard that the city was looking to take control, I was excited because I’m concerned that the county might be too slow and plodding to innovate quickly enough. But since the notion was floated, every indication is that the city doesn’t have a better idea. Rather, their notion of a library is one that does less, but is open for longer hours. Their big idea is to take control, and then cast it off to a cut-rate company on a long-term contract.
You’ve said it all, Mike. Longer hours with someone hanging around to turn off the lights isn’t service. This is a BAD idea. County may be slower with some things, but we get all the books we want. We don’t want some contractor sending profits to Maryland; and why should a library be making profits?! $ should be invested directly back into the system.
I’m still waiting for some to provide a list of the “enhanced services” the city claims it will offer. Srsly. I need it spelled out.
Well, I’m so late in responding, I doubt anyone will see, but I do want to answer the question Damageinc asked me.
I wrote: ““The primary problem with government produced services is the lack of competition, ”
to which Damageinc responded; “Once a business locks down a library contract what stops the service from declining? Who are they competing against?”
The answer is that the contract is not perpetual, and–assuming the municipality does things right–when it’s up there is bidding on a new contract. For example, I used to work for private companies that run hotels, restaurants, campgrounds, etc., in Yellowstone National Park. Their contract to run these amenities is limited in time, and they have to rebid, against open competition. The current contract-holder doesn’t always win. Over the years, as the National Park Service learned through experience, the contracts have been written so that they really work in the public’s favor, in ways such as requiring large-scale reinvestment in facilities by the companies that run them.
Of course if Tim is right that LSSI is the only company doing library services (and I’m too lazy to check right now
), then true competition for the contract won’t exist, and the city needs to be extra careful.
As an added note, some cities that have privatized services have later allowed their own city departments to bid for those services when the contract was up, and in some cases the city department actually submitted the best bid and won back the work. It sounds a bit bizarre, to be sure, but it’s a good way of putting that kind of competition even into services that are still publicly provided. To apply to this case, if–if–SCV privatized the library, a good outcome would be if the LA County Library bid on the contract when it came up in the future.
Please note I’m not advocating the city move forward with library privatization. I’m just noting that in general, privatization of services can work well, but only if the municipality does it well. When it goes wrong, the privatization can be very bad for the public. But in general such privatization of services is neither superior nor inferior–each case works well or doesn’t on its individual merits. And in this case I certainly don’t have enough information to make me confident that it would be a good move for the city at this time.
Margaret Todd pretty much answered your question with this statement -
“At present there are no former LA County libraries that are privatized. The City of
Calabasas,population 23, 700 did contract with LSSI when they left county service in the late 1990′s but has since terminated LSSI and hired city staff to run the operation.”
If we were to join a cooperative library system as the City keeps mentioning (Southern California Library Cooperative or SCLC) we would be a member of an association of 45 independent city and special district public libraries. Many of the libraries in SCLC are quality libraries like: Pasadena, So. Pasadena, Glendale, Calabasas, Burbank and more. So I called these libraries and asked who outsources to LSSI, the library company that keeps coming up in everything I read from the City?
Out of the 45 – one library contracts with LSSI and that is Moorpark City Library. Moorpark City Library withdrew from the Ventura County Library System in 2007 and began their partnership with LSSI in Germantown, Maryland. So that appears to be the one and only library we could visit to view a privatized model without driving to Riverside or Shasta.
Hmmmmmmmmmm – wonder why none of these other great City libraries in SCLC have chosen not to outsource to LSSI? That should tell us something right there.