Title: Back Talk - Memory Lane
Author: Tony Ferguson
Description: It's Budget Time!
Link: pdf
Back Talk Memory Lane: It's Budget Time!

Column Editor: Anthony (Tony) W. Ferguson (Library Director, University of Hong Kong)

This year, as I sat down to work with my new collection development, acquisitions, and serials librarians to talk about the book budget, I nostalgically thought back at the 15 years at Columbia when I would sit for hours at my computer working on spreadsheets (and not always backing them up on the computer and losing data at least once a year).

I had been involved in budgeting at BYU and Texas A&M, but my arrival at Columbia also coincided with (at least in my case) the personalization of the PC by doing Excel spreadsheets on my own. Earlier, budgets were the product of a secretary or other assistant who was good at the adding machine. He/she would run tape after tape (remember the paper tapes that came out of adding machines) each time something new was tried to spread too little money over too many needs. Since academic libraries can have hundreds of budgets, this is no mean task.

1986 was also firmly in the new age of participative management so while the making of spreadsheets might have been a solitary activity, getting selectors and departmental managers to buy into their outcomes was a group activity. Columbia was a paradise for those who like data on how much money is spent on what. For almost all departmental funds, we had separate serial, continuation, monograph, replacement, reserves, and librarian-assisted electronic searching funds. It was also a nightmare figuring out how much each fund should be increased or decreased.

These were great years at Columbia. In general, it was as if someone had decided in Columbia's Garden of Eden that library materials funds should be increased by 8 percent annually. Once this commandment was in place, it wasn't questioned. In the 15 years I was there, I had a couple of years above that percent, and a couple below it. When we went below, Elaine Sloan, the University Librarian squeezed the rest of the budget to soften the blow and to demonstrate to the faculty/administration that we believed in content.

During the process of dividing up the money we developed a few informal principles and practices that I think still have value:

1 We didn't use formulas. We had a taskforce that met for many months and came to the conclusion that even though formulas provided you with your own set of smoke and mirrors to disguise what you wanted to do, they were inflexible and to be avoided.

2 We allocated on the basis of need. A subcommittee of selectors would meet to review possible allocations based only upon price change data. Their recommendations were then sent to all the selectors who had to recommend what they thought was appropriate from their front line viewpoint. Initially we used zero based budgeting but that took too much time. After that, we annually allowed selectors to ask for more money, less money or to move money from one of their funds to another. If they wanted to do one of these three actions they had to justify in writing their actions on the basis of changes in the universe of publication, or changes in the nature of their user community. Then the subcommittee would meet to review their requests. They were a tough group who were usually more hard-hearted than I. However, I found this system built trust. Even if a selector didn't get what they wanted, they felt that the system was about as fair as was humanly possible.

3 We made changes in serials funds on the basis of actual expenditures ­ not on the basis of what their budget was like the previous year. We would look at the three previous years spending history to detect if there were irregularities in the data, but if a fund was not spent, it would be reduced to fit the projected need. To prevent reckless spending we followed the next rule.

4 New serials equal to 3-5 percent of an allocation could be placed if the fund had not been overspent the previous year. This simple rule of thumb is from Dean Larsen at BYU, one of the great collection developers of all time.

5 In the mid 90's, in order to prevent serials creep, we instituted the rule that only a set percent of the total budget could be spent on serials. Since the budget was growing, and by then the dollar was stable, it worked great. Had the increases disappeared or a failing dollar reappeared, serials funds would have been in trouble and cuts would have followed. But in general, setting a percent of the total budget (not individual departmental budgets) helped us end the cyclical buy and cut syndrome.

6 We used the ARL charts that showed skyward serials inflation and downward monograph purchases to defend our budgets, but we recognized that there are many local issues that tend to place our own experience in between these two extremes. Like in the story of Chicken Little, the sky might be falling but nothing is as bad as the rhetoric. Your might use worst-case figures when applying for funds, but never when actually allocating them.

7 We tried to buy consortially at all times but we went with the best consortium. This meant that we were not always seen as loyal members of a group, but it also insured that we did not spend more than was necessary.

8 We always set aside flexibility money to meet unforeseen needs. Flexibility money could not, however, be used to pay for serials purchases whether digital or print.

During the 1990's the issue of how to fund the purchase of electronic forms of information emerged. Our policies evolved over time. Initially, we said that if it was a CD-ROM and was a one-time purchase, monograph funds should be used. If it involved a subscription, serials funds should be used. This was easy to say, but few new electronic titles were purchased. First of all, selectors already hard pressed to buy everything they felt was needed, wanted new money to buy these new forms of information. Second, many of the new titles, especially the expensive ones, were cross-disciplinary. To purchase these titles, coalitions of selectors had to develop. These coalitions were not emerging because selectors didn't feel they had the authority to add their faculty's money to pots they did not control. We were at a bit of a standstill. We knew that there were lots of new titles to be purchased, but we were not able to buy them. We had plenty of money but it wasn't in the right places.

At this point my public service and technical services colleagues (I won't mention their names intentionally) and I decided that we would have to artificially create some new money by scraping a few hundred thousand off the top of the new year's allocation. The selectors were not happy to have been robbed, but they were happy to see new money to buy new electronic forms of information. I also had to promise not to do it again.

We then went through a few years of what I call the "my money" versus "other people's money" syndrome. Selectors were happy to spend other people's money on multi-disciplinary titles or packages, but they were loathe to spend their own money. When the buying power of the scraped funds dwindled, what we needed was more money to be moved from their funds to the central electronic budget. But this was just like the old problem of moving money to pots that the donor/selectors did not control. At this point we divided up the central pot into a group of divisional pots and turned the control of these funds over to the selectors. With this power, some of these groups began to move former print money to their digital pots.

Even this, however, didn't enable us to move sufficient funds to digital uses fast enough to keep up with the increases in what was available, e.g., titles like Science Direct. We then put into place a fund increase control plan that restricted the overall increases allowed for books and serials in order to guarantee 15 to 20 percent increases for the divisional electronic pots annually. Our goal, fairly modest compared to what is happening now, was to nearly triple our electronic expenditures to a lofty eleven percent of all funds within five years. We fairly quickly achieved that goal and were closing on fifteen percent when I left Columbia. Because Columbia's budget is large, fifteen percent represented a significant pile of money.

So, here I am in Hong Kong. Still dealing with the exact same issues. But thankfully I am not the one doing the spreadsheets. Happy budgeting to you all!