The whole cost of libraries - Library Finance: New Needs, New Models

Library Trends, Wntr, 1994 by John A. Dunn, Jr., Murray S. Martin

Abstract

Most people think of the cost of a library in terms of its assigned budget, which sets out the annual allocation of specific sums of money for specific purposes. This budget is only symbolic since, in many cases, certain kinds of expenditures are not included, and some, such as opportunity costs, cannot, because of their nature, be included in a financial statement. In addition, a relatively new concept, "value maintenance," should be considered. Almost all writing by academic librarians has been concerned with operating budgets rather than the total costs of libraries. Here an attempt will be made to review the kinds of costs involved and how they affect the real cost of running a library. For the most part, first attention will be given to academic libraries, but, where appropriate, reference will be made to other libraries.

INTRODUCTION

In addition to the operating budget, which may also include endowment and similar special funds, there may also be capital budgets. The interaction among these budgets is seldom stated, though many academic institutions have begun the practice of including some kind of operating endowment in fund drives meant to finance new construction.

Most institutional budgets are aggregated from budget requests submitted by various agencies who may or may not have engaged in any prior consultations. The fragmentary nature of institutional budgeting makes it clear that the true cost of running a library is not simply that shown in the operating budget.

Different kinds of libraries receive different kinds of budgetary treatment. In general, public library budgets are the most comprehensive, since they operate autonomously and have to be responsible, for example, for utility and cleaning costs, which seldom show up in an academic library budget. Special libraries sometimes do not have a direct budget, and their costs are paid from various sources as appropriate or charged back to various accounts. Some academic budgets make provision for staff benefits, while in other cases these are charged against a central fund. These variations exist whatever budget style is used - from the simplest line item to the most complicated program budget. This makes consideration of total library costs a very complex matter, but, in view of the need for exercising the highest level of budgetary restraint, it is essential to know what these costs are.

BUILDING AND MAINTENANCE COSTS

Among the most important costs that do not usually show up directly in an academic or special library budget are those related to the building and its equipment. These include utility costs - heat, light, and power - which may be included in another part of the institutional budget, somewhat in the manner of overhead. Given the size of most libraries and the fact that they are open long hours with sizable populations, it is clear that building maintenance costs will also be sizable. It is, therefore, strange that these costs are seldom taken into consideration when planning new or renovated libraries.[1]

Added power consumption or changes in heating, ventilation, and air conditioning (HVAC) requirements are seldom considered when planning for the installation of automated systems, despite the fact that concentrations of machines and people tend to generate both heat and noise beyond that expected in the simpler days when most libraries were planned. This is particularly important when the need is to fit systems into an existing building.

Most library budgets include lines for door guards, and some include at least a part-time position responsible for building security, but few budgets (other than public libraries) include the cost of personal security or of cleaning, though both can be substantial in a large library. In part, this is because these activities are the responsibilities of other parts of the organization, which are themselves differently organized. It may be possible to extract costs associated with the library, but this kind of effort tends to be more expensive than the results are worth. It also results from the fact that different reporting mechanisms result in the activities being under the charge of different senior officers, so that there may be little or no interaction in the course of budget decision making.

Personal security is usually the responsibility of another agency, though there has been a move in some institutions to involve a wider range of administrators. Whereas the actual costs of repairs to the building may be charged back to the library budget, it is not often seen as parallel that the costs of personnel safety incidents should also be charged back. In fact, because of the nature of the building's use and the value of the materials housed, most libraries do make de facto assignments concerned with personal safety without showing the cost separately. Again, because they operate separately, large public libraries and museums have arrived at much better estimates of such costs and include them in their budgets.[2] Because such considerations can affect the ways in which libraries (or individual departments such as Special Collections) can operate, their incorporation into the library budget, or at least consultation about these costs, would make clearer the actual cost of operation and enable better decisions to be made about how to do business.