Annual Privatization Report

California Library Privatization Success in Jeopardy

Meanwhile, successful partnerships thrive in Florida, Oregon and elsewhere

In Reason Foundation’s Annual Privatization Report 2010: Local Government Privatization, we chronicled the growing trend of municipal library privatization in California, primarily with Maryland-based national provider Library Systems & Services, Inc. (LSSI). According to their website, LSSI now works with 17 municipalities operating 69 branch libraries and two bookmobiles across the country. (In contrast, the American Library Association estimates there are 122,000 publicly operated libraries in the United States today.) Mia Pezzanite, spokeswoman for LSSI, explained their role to The Santa Clarita Valley Signal in March 2011 saying:

What we see from communities, generally, is that they are looking to have more local control over libraries... In today’ s economic environment, many local governments, especially those in California, are under increased pressure to reduce expenditures— without reducing services.[1]

Another example is Jackson County, Oregon, which had all 15 library branches closed for six months due to budget cuts until a 2007 agreement with LSSI allowed them to open again.[2]

In several California cases, municipalities sought privatization concurrent with moves to withdraw their libraries from cash-strapped counties. Prominent municipalities have led in this policy area, including:

  • Riverside County: The first local government in the nation to contract with LSSI in 1997;
  • Moorpark: Withdrew from the Ventura County library system in 2007;
  • Redding: The Redding City Council voted unanimously last year to extend its contract with LSSI, which began in 2008;
  • Santa Clarita: Decided in August 2010 to partner with LSSI signing a six-year contract, relying on strong support from Mayor Marsha McLean.
  • Camarillo: Officials voted unanimously to withdraw from the Ventura County Library System and save $600,000 annually by partnering with LSSI.

The Camarillo deal revealed an inexplicable rule whereby the city paid fees to Ventura County based on their average total circulation. This caused library officials to ask their local Friends of the Library chapter to stop donating so many books because it was driving operating costs up.[3] Privatization gave officials greater control and flexibility, and exempted them from nonsensical rules like this.

Increasing municipal privatization success drew the suspicion of Sacramento lawmakers who leapt into action by passing Assembly Bill 438 (proposed by California Assemblyman Das Williams, D- Santa Barbara). AB 438 imposes a litany of regulations that will make it more difficult for municipalities to find ways to reduce operating expenses and keep libraries open by partnering with the private sector.

Despite a loud chorus of opposition, Governor Jerry Brown signed AB 438 into law by on October 8, 2011. AB 438 drew widespread criticism from a range of individuals and organizations citing the importance of maintaining local jurisdiction over libraries, such as: the California League of Cities, Santa Clarita Mayor Marsha McLean, State Senator Bob Huff (R-Diamond Bar), Assemblyman Brian Nestande (R-Palm Desert) and The Oakland Tribune. Sen. Huff told the Associated Press on September 8, 2011 that the bill, “‘incrementally ties local governments’ hands’ as they struggle to provide basic services.”[4] Kyra Ross, legislative representative at the League of California Cities, explained to Stateline.org in August 2011, “The practical impact of this bill is to simply ban a city from contracting out library services.”[5]

Specifically, AB 438 mandates municipalities choosing to privatize are not allowed to reduce the size of their library staffs. Further, it mandates every single current library employee must keep his or her job in any future public-private partnership (PPP) agreement. Cities will also be forced to invest significant resources submitting studies and reports for Sacramento lawmakers in order to obtain the state’s permission to privatize. Lastly, local officials would be required to submit an external audit before hiring a private operator charging more than $100,000 a year. Opponents derided the bill as a solution in search of a problem. Santa Clarita Mayor Marsha McLean wrote in an August 2011 Pasadena Star News op-ed:

In an era of diminishing funding for local government services and overextended budgets, contracting for library services is one way to improve libraries, while reducing the tax burden on our residents... It is ironic that supporters of AB 438 would take decision-making out of local communities and place it in the hands of state legislators and special interests.[6]

McLean’s support for privatization paid off. She detailed in the aforementioned op-ed how changes in management have led to increased hours of operation, the addition of $900,000 in new materials, and provided for a $300,000 annual increase in the book and media budget for new materials. On top of that, the city is currently constructing a new 30,000-square-foot state-of-the-art facility to replace the decades-old 5,000-square-foot facility.

AB 438 was fueled by fears that private companies would restrict access to libraries and overcharge for public access to content. LSSI CEO Brad King explained to Stateline.org on August 1, 2011 that in reality, “(LSSI has) never charged a fee to the public for a service at all, ever.”[7] In its final form, AB 438 was amended to allow local officials to partner with nonprofit private operators, however local control advocates were not assuaged by the exception.

It’s difficult to foresee the full impact of this legislation, however discussion in Simi Valley serves as an effective barometer. The Simi Valley City Council had a rushed discussion in November 2011 where they explored leaving the Ventura County Library System and partnering with a private operator before AB 438 goes into effect (January 1, 2012). City Manager Mike Sedell explained their sense of urgency saying the new state restrictions will set “overbearing requirements for a city to withdraw from any district and contract for services in the future.”[8]

Once AB 438 goes into effect, reduced operating hours, staffing and programming—and increased frequency of library closure—are likely to follow in California.

Policymakers in California aren’t the only ones to explore partnering with the private sector to keep libraries open. The Osceola County, Florida county commissioners voted 3–2 in December 2011 to turn management of the county’s six-branch library system to LSSI. The commissioners faced urgency in grappling with the library systems’ $3 million budget deficit. Policymakers ultimately signed a five-year, $35 million contract projected to save the county over $6 million over the course of the contract. The offer also included job offers for all 80 current public employees (76 of whom agreed to say on with LSSI.)

Harris Kenny is a policy analyst at Reason Foundation. A modified version of this article was published in Reason Foundation's Annual Privatization Report 2011: Local Government report. For an update on the Osceola County library partnership, see this Innovators in Action interview with Osceola County, Florida Commissioner Frank Attkisson.


Notes

[1] Jim Holt, “State to look at library bill,” March 30, 2011.

[2] Melissa Maynard, “Outsourcing the local library can lead to a loud backlash,” Stateline, August 1, 2011.

[3] Matthew Cunningham, “Don’t Privatize That Book!” City Journal, June 9, 2011.

[4] “Senate restricts attempts to privatize libraries,” The Associated Press, September 8, 2011.

[5] Maynard, “Outsourcing the local library can lead to a loud backlash.”

[6] Marsha McLean, “Privatize libraries in their interest,” Pasadena Star News, August 30, 2011.

[7] Maynard, “Outsourcing the local library can lead to a loud backlash.”

[8] Carissa March, “Simi Valley Library latest to consider leaving system,” Thousand Oaks Acorn, November 3, 2011.

Harris Kenny is Policy Analyst





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