More Consortial Consolidation

by | Jan 15, 2010 | 0 comments

New Midwest Collaborative for Library Services, following LYRASIS example, driven by need for scale

Norman Oder — Library Journal, 12/22/2009

Merger of equals
INCOLSA losing money, MLC in the black

MLC’s Dykhuis to head

In another example of consolidation among networks spurred by changing OCLC reimbursement and the need for economies of scale, the members of the Michigan Library Consortium (MLC) and Indiana’s INCOLSA, Inc. have approved a merger, creating the Midwest Collaborative for Library Services (MCLS), which will have a combined membership of over 1300 institutions of all types and sizes.

Randy Dykhuis, MLC executive director, will head the newly created MCLS. “As we move forward as a combined organization, I look forward to continuing the good work that both organizations have done and expanding services in both states,” Dykhuis said. “With our combined membership we expect to deliver enhanced savings on services such as group licenses and to expand resource sharing options for residents of both states.”

Each organization will have an equal number of seats on the board in a merger of equals.

Driven by need to save

The formation earlier this year of LYRASIS out of Solinet and Palinet (and later Nelinet) was driven, in part, by change in the network business relationship with OCLC, effective July 1, 2009. Similarly, a merger FAQ for the new organization states:

The current economic climate that has severely impacted library budgets and recent changes in the OCLC-Network relationship have created an opportunity to re-evaluate the types of services we offer to libraries and to rethink the organizational structure needed to support new and expanding services. By combining our staff and financial resources we will be in a better, more nimble position to develop and support new initiatives that will save our members time and money.

Among the expected services are a regional union catalog and linked delivery systems, strong partnerships with state libraries, partnerships with other consortia, additional training, and new products and services.

Financial details

According to an FAQ about finances, MLC has been in the black for 15 years, but INCOLSA has lost about $1 million per year for the past three years, with some specific programs “incurring substantial losses.”

While INCOLSA has $2.1 million in a reserve fund plus a building worth $1 million, the executive committee did not want to continue to spend down the reserve fund.

Each organization will bring buildings and equipment worth approximately $1 million to the new organization, while INCOLSA will bring its $2.1 million in cash and MLC will bring $3.3 million.

According to a Memorandum of Understanding, some layoffs may take place; employees of MLC and INCOLSA will be entitled to severance benefits equivalent to those set by their original organizations.

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