American Library Association Budget Analysis and Review Committee (BARC) Report to the ALA Executive Board

2008-2009 EBD #3.0

2009 Annual Conference


Wednesday, July 15


It is my pleasure to report to the Executive Board on the activities of the Budget Analysis and Review Committee (BARC) at this Annual Conference. Below are some topics BARC discussed:

  • FY 2009 Budget Update (5-31-09) – BARC #5.12
  • FY 2010 Budget Update – BARC #26.2
  • Electronic Participation Options & Costs – BARC #19.1
  • Status Report on Electronic Member Participation – BARC #19.2
  • Expanding Council Transparency – BARC #22.0
  • Division/BARC Leadership

On Friday afternoon, July 10, BARC and met and discussed the following:

FY 2009 Budget Update (5-31-09) – BARC #5.12

For the nine month period ending 5-31-09 ALA reported total ALA (all combined funds) revenue of $36.7 million or $2.3 million (6%) less than budget. The General Fund revenue of $16.4 million were $2.1 million (11%) less than budget due in part to Publishing and Member Programs and Services. Division revenues were 5% or $541,000 less than budget and Grants and Awards are $201,000 more than budget year-to-date. Investment interest and dividends are more than budget by $190,000 (37%) reaching $711,000.

Total ALA expenses of 38.9 million are $4.7 million (11%) less than budget. The General Fund expenses of $18.9 million are $3.3 million (15%) less than budget. The primary contributors are Publishing ($1.6 million), Communications ($199,000) and Annual Conference ($833,000). Division expenses are $1.5 million less than budget, while Grants and Awards are $201,000 more than budget.

For the General Fund the result is a net loss of $2.3 million, which is better than the budget target of a net loss of $3.7 million. The projected revenue is still on track to reach $27.3 million with projected expenses at $28.9 million. Budget adjustments of $447,000, accounting adjustments of $741,000 and $436,000 from General Fund reserves will cover the net shortfall.

FY 2010 Budget Update – BARC #26.2

General Fund Budget

Senior staff presented BARC with the total Preliminary FY 2010 Budget of $55,176,678 in Revenue and expenses budgeted at $54,521,264. This compares to budgeted revenues and expenses in FY 2009 of $58,842,929 and $59,809,440 respectively. For FY 2010 revenues exceed expenses by $655,414 as there will be two national Division conferences during the year.

The General Fund for FY 2010 has budgeted revenues of $28,313,585 million. This consists of Dues income of $6,238,400 which is an increase of $335,142 compared to FY 2009 projections. This is a function of annualizing dues at different anniversary dates in FY 2009 being fully actualized in FY 2010. Additionally, this assumes that regular member levels will remain essentially flat during the year with slight increases in student and support staff members. The sale of materials, which includes the sale of books, is budgeted for a total of $4,874,526 as compared to $5,572,643 in FY 2009. There will be a total of 34 front list titles in ALA Editions. The editorial staff has experienced an increase in author signings, along with enhanced customer reach via the Web 2.0 online store. Additionally, new revenues opportunities are being implemented such as the introduction of a new series called ALA Classics. Graphics is budgeted to reach $1,983,929 which represents a reduction of $313,856 from FY 2009. This is in recognition of the downturn in library and individual purchases. Positive products should be items like the Jonas Brothers, Neo and the Yao Ming poster in English and Mandarin. Subscriptions, a function of Booklist, Booklist Online and book Links, are budgeted at $2,763,844 compared to $3,001,348 in FY 2009. Advertising income is projected to decrease to $3,812,896, which is $634,561 less than the approved FY 2009 budget. Advertising is an area that has been hit hard by the weakness in the economy. Revenue from meetings and conferences are budgeted at $7,570,800, which is a decrease of $225,525 from the FY 2009 budget. Both conferences will be on the east coast (Boston and Washington), which has historically been a good draw for attendance. Expenses for the General Fund are budgeted at $28,313,585 which is $1,750,527 (5.8%) less than the FY 2009 budget. These expenses also include $305,473 in unallocated expenses related to a placeholder for the possible funding of 3.0 FTE’s. These positions are related to Chapter Relations, ITTS and OGR


Division and Unit Budgets

Revenues are budgeted at $17,026,870, which is an increase of $2,709,344 over FY 2009. This is due primarily to the two national division conferences planned for FY 2010. By the end of FY 2009 the division fund net asset balance are budgeted to reach $9,212,214. Net revenue has been budgeted to be conservative, particularly for the PLA and AASL national conferences. Net revenue is budgeted at a net loss of $3,521 for FY 2010. The divisions are also planning net asset transfers to the endowment fund in the amount of $550,000. Although there were no new requested positions for FY 2010 there are two unfunded positions – ASCLA/RUSA Deputy Director and ACRL administrative assistant. Total expenses are budgeted at $17,030,391. This is an increase of $611,843 or 3.7% over FY 2009 related primarily to the national conferences i.e. outside services, overhead and travel. Small division support will total $81,297 compared to $135,720 in FY 2009.

Round Tables have budgeted revenues of $356,005, which is down from $380,144 in FY 2009. Dues will account for approximately 49% of revenue. Expenses are budgeted at $374,502 resulting in a net loss of $18,497. The Plant Fund budget, which covers the costs related to the 40 & 50 East Huron buildings, the Washington office and Choice, is $2,021,767. There will be a General fund transfer of $1,717,853 to cover all building related expenses. The Choice portion of the cost is #303,914 which includes repairs, maintenance, utilities, leased equipment, interest expense and property taxes. The Long-Term Investment Fund is budgeted to generate $677,432 in revenue to fund scholarships and awards. Grants and Awards are budgeted at $8,195,537 but will likely be adjusted for pending proposals awaiting approval. Overhead recovered from grants are budgeted at $768,215 and will offset expenses in the General Fund. The capital budget for FY 2010 totals $2,155,041. This budget maintains ALA’s property. This also includes investment in computer and technology of $1,407,950. Office furniture and building improvement total $497,091. The capital contingency of $100,000 is for unexpected contingencies.


Electronic Participation Options & Costs – BARC #19.1

The committee received an update on the status of the recommendations of the Task Force on Electronic Participation that were presented at the Midwinter meeting. Staff investigated a number of electronic participation options and their associated costs. The areas covered Council meetings, Membership Meetings, Governing Board Meetings and Conference Meetings & Programs. Note that the costs associated with these categories were done in conjunction with audio/visual providers used at the Midwinter Meeting, Annual Conference and Conference Services. They were as follows:

Council Meetings – Currently $80,000 (annually) for face to face meeting. Estimated additional costs for a web cast ($20,000), virtual participation ($144,000), electronic voting ($20,000) and electronic voting between Council meetings ($0) are $104,000.

Membership Meetings – Currently $14,000 (annually) for face to face meeting. Estimated additional costs for a web cast ($19,000), virtual participation ($46,000) are $65,000.

Governing Body Meetings – Currently $17,000 (annually) for face to face meeting and 11,000 (annually) for conference calls.

Conference Meetings and Program s– Currently $99,000 (annually) for face to face meeting. Estimated additional costs for a web cast ($4,000), virtual participation ($1.6 million), Meeting microphones ($500 per day/mgt) conference programs ($1,500 - $2,500 per program) virtual program participation ($261,000)

Status Report on Electronic Member Participation – BARC #19.2

Management summarized for the committee status of the recommendations discussed by the Task force at the Midwinter Meeting in Denver. A number of committees have already begun work on the recommendations where immediate action is feasible. On June 15, 2009 the ALA Executive Board formally confirmed referral recommendations and referred recommendations to such groups, but not limited to, the ALA Policy Monitoring Committee, BARC, Constitution and Bylaws Committee and Committee on Training, Orientation and Leadership Development etc. As a result, a number of the recommendations were acted on in the form of “experiments.” A LITA task force has created a toolkit to assist and address the skill/experience gap. To assist ALA management has been working to make wireless broadband access available as a platform for groups to conduct meetings. As a result wireless access will be freely available to attendees in most areas of the convention center. The cost to ALA is $10,000. Additionally, ALA has set aside $40,000 from 2010 Initiative funding to support experimentation at the Annual Conference in the form of 50 meeting rooms. A range of groups have been identified to participate. Phase I of ALA Connect went live on April 6th. As direct features or capabilities of the technology are developed, ALA Connect is expected to be the new way for individuals and groups to communicate.

As a result some of the success of division efforts (PLA & ACRL) on hosting virtual conferences, ALA has decided to build on their success. During this conference Ala will be offering its first virtual conference. There will be ten interactive web sessions on 7/13 and 7/14 provided by the Washington Office OIF and other Divisions. All full registrants will havwe access after the conference and non-attendees can register online through the ALA web site. The cost structure varies based on membership status.

Expanding Council Transparency – BARC #22.0

Management summarized for the committee the work on the implementation of the resolution passed by Council at the 2008 Annual Conference which instructed the Executive Director to explore methods for making Council proceedings transparent to membership. Four options were explored and are as follows:

  1. Posting a transcript of Council proceedings - $3,000 - $5,000 additional per conference
  2. Posting an audio Recording of Council Proceedings - $1,500 per year
  3. Real time streaming audio webcast - $11,000 per year
  4. Real time audio/video webcast - $55,000 per year


In recognition of the financial constraints that the Association is currently working under, it was determined that some combination of edited transcript derived from the captionist’s transcript, along with an audio recording and Council documents was the most economic and reasonable way to increase member access to Council proceedings. The total cost of such an approach is projected to cost approximately $5,000 per year. It should be noted that ALA legal counsel was consulted and management was informed that publication of such transcripts increased the risk of legal liability due to statements made by individual Councilors. The survey on member interest was held pending the outcome of the survey conducted by the Task Force on Electronic Participation.

Division/BARC Leadership Meeting

Acknowledgements

We continue to be well served by Greg Calloway, Keith Brown, Sandra Lee, Russ Swedowski and Elaine Klimek of the ALA financial staff. They have been very dependable, reliable and thorough in assisting in our financial oversight responsibilities.

Respectfully submitted:

Jim Neal, Chair

Tyrone Cannon

Audra Caplan

Joseph Eagan

Norman Eriksen

Joan Giesecke

Rod Hersberger, Treasurer

Charles Kratz, Jr. (Absent)

J. Linda Williams

BARC 2009 AC Board Report..DOC