Budget and Finance: A Librarian's Guide to Effective Budgeting: Day One

When I saw the announcement for this PLA course I knew that it was just what I needed for my own staff development. Even though I had the experience of managing the AskUsNow! Grant budget for several years, and now have had the great learning experience of coordinating the WMRL budget process through two cycles, I knew that it would be very useful to get a better understanding of the types of budgets that are used by organizations and determine how to most effectively relate the budget to the programs offered by the WMRL (especially as we launch into a new strategic planning process). So yesterday I drove up to Saratoga Springs, NY and spent today (Wednesday, Sept. 29, 2010) in the community room at the Saratoga Springs Public Library with instructor Sandra Nelson and a group of about 40 participants ranging from NY, MA, NH, CT, OH, two of us from Maryland, and even one person from Missouri. Most people are library directors or assistant directors, and there are even a few trustees in attendance.

The part of the day that I felt was the most insightful was about the different types of library budgets. There are four types, and each has benefits and drawbacks.

Line Item Budgets (#1) are most commonly used (as at WMRL). Many libraries are required to use line item budgets by their county or other funding agency. They are familiar and in common use and serve as the first step for most other types of budgets. The drawback is that they don’t show you the cost of specific programs and tend to reinforce the status quo, since libraries tend to simply increase or decrease budget lines as funding varies. Stuff tends to collect that may no longer be priorities.

Program Budgets (#2) takes a line item budget a step further and shows you subsets. It informs you about your investment and shows you the relationships among programs since it links the priorities of the strategic plan to the budget. It can show you how expensive a program is that you hadn’t realized had a very high cost (such as having 2 staff take 2 days to create up a bulletin board display). A drawback is that it’s more time consuming since it adds a step. Doing a Program budget may make some staff uncomfortable if they interpret that you don’t trust them, when in fact you really just need to be able to make data-driven decisions. You’ll want to use a Program budget to develop a cost-benefit analysis. It is useful when you are seeking funding for a specific program. Grants are a common example of a Programmatic budget. Most libraries go as far as selective program budgeting.

A Performance Budget (#3) starts with the Program budget, but goes to the next step and prescribes outcomes, which are expected to be achieved. It encourages accountability and forces the library to take the program budget seriously. The lead drawback is that this type of budget can be very time consuming and if the plan isn’t good it can result in something that just doesn’t make sense.

A Zero-Based Budget (#4) is really the complete opposite of a Line Item Budget and starts out with no funds being authorized for anything in particular. Every cent must be justified every budget cycle and every moment of staff time is developed programmatically. The benefit is that you know how much every single thing costs and it allows you to let your funders know exactly what you do. As a new director, applying some of the zero-based approach to your own planning can help to force you to do the math. The drawback is that it’s a brutal process: It’s extremely time consuming and barely any organization stays with it after going through it once. Staff of course feel highly threatened. Very few people know how to do this type of process properly and generally only organizations that have been specifically asked by funders to take part in the zero-based approach do it.

Useful points made during the day (some are simply affirmations of what we’d already expect):

1. The projection for libraries isn’t good. Libraries need to embrace the greatest good for the greatest number of people. We can’t be wimps about getting complaints from one or two people, whether they be members of the public or staff members. Don’t be afraid to reallocate resources!
2. Budgets are data-driven, defendable, and defensible.
3. The most important part of the strategic plan is the implementation.
4. Don’t take a crisis to your board/funder. Give them a solution. A budget that is monitored appropriately gives you the forewarning to solve a potential budget problem before it’s a crisis. For instance, if you’re spending a lot more on heating during the winter than usual, don’t wait until the spring to try to resolve it.
5. Use budget as a tool for accountability and make the adjustments as necessary.
6. Sooner or later you need to figure out how long it takes to complete a specific activity. What does it cost to deliver a specific service? That leads back to the programmatic budget.
7. The current reality is that the public is not willing to pay for the services that they receive. As long as that dynamic remains, special tax districts are doing better than libraries receiving a line item in the general fund.
8. Each of us is always talking about our own unique library situation, which makes is very hard to compare apples to apples. However, thankfully you can compare budgets year within your own organization.
9. Libraries are moving in the direction of greater public/private relationships – that’s why foundations are becoming increasingly important. Libraries will be unlikely to be able to maintain current levels of service without developing these relationships.
10. It’s usually better to have a board member present the budget to the county than a library employee. They have more authority in the funder’s eyes. Board president and library director presenting together would be fine, but you want to avoid having the library employee seem to be in a self-serving role.
11. In some library budgets, Personnel must be totally separated from Operations and other expenses. Usually this is due to a county requirement to control increase/decrease of FTEs.
12. Some place in the budget you need to show that you have planned for capital maintenance: replacement for the roof (20 years), HVAC (10-15 years), carpet (5 years), etc.
13. Training is the last thing that should be cut from library budgets, although it’s often the first to go (Sandy’s opinion, which I agree)

That’s all for Day 1. More tomorrow! I may not get a chance to post until the weekend though, since I plan to drive back tomorrow evening. Thanks for reading. :)

-Joe

Introduction to RDA (ALCTS webinar)

Staff member: Carrie Willson-Plymire
Original event date: September 22, 2010
Original event time: 5:00-6:00pm
Speaker: Robert Ellett

Train the Trainer

Staff member: Carrie Willson-Plymire
Original event date: September 21, 2010
Original event time: 9:30-4:00pm
Speakers: Gail Griffith






Highly recommended! This program will be offered again, so consider attending if you do any sort of training.

WCFL/WMRL Book Club Meeting #1 Minutes

The WCFL/WMRL staff book club met for the first time today from 12:00-1:00PM in the B/C meeting room to discuss the first part of the book, Switch: How to change things when change is hard, by Dan and Chip Heath. Here are some of the highlights from that meeting. Those in attendance and those who are participating but couldn't attend today's session are encouraged to add comments that elaborate on any of the issues noted below.

A-Ha Moments

• The idea that will power is limited; it doesn't mean we are lazy; and it's nice to know that we aren't alone in this feeling (everyone experiences this from time to time)
• The examples illustrated in the book are true (i.e. BP, the Brazilian Railroad, the Vietnamese children)
• It's refreshing to know that in order to make a change we don't have to address everything. We just have to make baby steps--Like with the 1% milk example.
• Challenge: would the 1% milk campaign have worked in other locations such as California which is vastly different from West Virginia? Or would they have experienced decision paralysis because of soy vs organic vs 1% vs no milk at all. What do you all think?
• Several folks brought up an outside example. Jamie Oliver tried to revamp the quality of food that was served in schools as a way of getting West Virginians to improve their diet and at first he failed miserably - as the group deduced, it was probably because of his approach. He started out by coming in as this expert and the notion of why wouldn't anyone not listen to him? FAIL. But try, try again he did and was more successful with his food revolution which appealed to several individuals' elephants. He brought in truckloads of fat in order to illustrate just how unhealthy the food was that was being served at the schools. He showed people a mortuary where there were coffins for obese people, specially designed hearses that are equipped to fit the over sized coffins, and the issues people encountered when trying to transport these coffins. (To those who shared this story, please help me clarify this example a little better!)
• It was interesting to read about the Brazilian railroad's goals as they seemed to be contrary to what the norm is (quick fixes vs. long term fixes).
• A couple parallels were drawn between this section of the book and the renovation of the Hagerstown branch library. Why tear it down and rebuild when it seems like we could simply re-purpose/recycle what we already have access to and only make small additions to the portions of the building that need them.
• Another parallel was made between this section and the Longmeadow shopping center. One one side of the street is a rundown strip mall but instead of renovating it, a newer shopping center was built on the other side. Is this the best use of Hagerstown resources?
  
• One reader interpreted the first section of Switch in political terms where the Rider is President Obama, the people are the elephant, but the problem with the political process is the path. For example, the health care debate. The President more or less charged congress with figuring out a way for all Americans to have health care but he didn't outline the steps to get there. He didn't script the critical moves which seems to have lead to paralysis in the face of ambiguity.

Real-World Example (to be carried through the next 3 book club meetings)

Problem: Dirty dishes are left in the sink in the staff lounge on a daily basis. How do we change staff behavior so that each person washes his/her dirty dishes rather than leaving them in the sink?

Goal (postcard view): There will be no dirty dishes left in the sink or on the counters. They will be washed and placed in the drainer to dry and then put away in the cupboards.

Why do people not wash their dishes?

• Time
• "I don't do dishes"
• Monkey see, monkey do
• "It's not my job" or "It's someone else's job"
• Plan on doing it later and then forget (or maybe they don't)
  
• Water doesn't get hot enough
• The soap isn't the kind that softens my hands
• I'm a sponge user and there are no sponges (vice versa w/wash cloths)
  
• Someone else always washes my dishes so, I figured it was ok
• There are no consequences for leaving the dirty dishes in the sink
  

Why do some people wash their dishes (and in some cases, wash others' dishes)? These are the bright spots:

• A sense of personal/professional responsibility
• It's the right thing to do
• Courtesy
• Reducing health issues (bugs, germs, etc)

How are we going to change behaviors?

• Modify the environment by providing a dishwasher
• Modify the environment by providing a sponge/soap combo gadget
• Take the dishes/silverware away thereby causing staff to provide their own dishes/silverware. The idea behind this is that people will be more responsible with their own personal belongings than with community belongings.
• Reinstate housekeeping committee?
• Build this topic into the ethics discussion at staff day (ethics) and use in conjunction with the move to Phoenix Color/North Pointe/Susquehanna
  
• Make an xtranormal.com video in order to communicate and motivate
• Advertise: Will work for dish money. Either pay me to do your dirty dishes or do them yourself for free!

To be continued on Oct. 14, 2010

Web Resources for Children's Librarians

This workshop highlighted quality web resources to be used by children and/or adults working with children. Most of these recommended sites utilize human editing or reviewing as opposed to machine selection (e.g. Google search).

The recommended web resources included child-friendly directories, reading resources, image searching, film guides and reviews, and reference tools on the web. Sites specifically geared toward parents and public librarians were also showcased. A full listing of these websites can be found here.

My favorite sites were DAWCL, Author Name Pronunciation Guide, and NCES Search for Schools.

The Database of Award Winning Children’s Literature, aka DAWCL, is a searchable database of 8,300 award winning books. Ninety-one awards across six English-speaking countries are included. Searches can be conducted using the following criteria: suggested age of reader, format, setting, genre, historical period, multicultural, ethnicity/nationality of protagonist or tale, gender of protagonist, languages, publication year, keyword or phrase, author/illustrator/translator, and award. An explanation of awards and calendar of awards is also provided.

Author Name Pronunciation Guide is a fun, yet useful, tool. How many times have you needed to tell a patron about an author only to feel uncertain about the pronunciation of his or her name? Jon Scieszka? Shirley Hrdlitschka? Genevieve Simermeyer? This site is a collection of brief recordings of authors and illustrators saying their names. As someone who has her name butchered on a near-daily basis, using correct pronunciation for other people’s names is of great importance to me.

The National Center for Education Statistics’ Search for Schools [and public libraries] offers a wonderful resource for parents, educators, and librarians. Parents can obtain valuable information about schools when considering a move to a new area. Educators and librarians can use this same information when applying for grants. Some of the information to be found includes student/teacher ratio, enrollment by race/ethnicity, enrollment by grade, and number of students eligible for free or reduced-price lunch.

It was helpful to have someone else do the legwork of selecting quality web resources for children, parents, educators, and librarians. I have already added a number of these recommended sites to the Kids portion of our webpage.