Budget

and Financial Analysis Exercise: DePaul University Library Jason D. Nosek Dominican University, Graduate School of Library and Information Science

Budget and Financial Analysis Exercise Introduction The National Center for Education Statistics (NCES) Library Statistics Program (LSP) allows the general public access to a plethora of financial information related to accredited higher education (college and university) libraries. Users visiting the NCES- LSP website are allowed to select an institution (and a group of cohorts, if s/he so choose) and retrieve information, which is self-reported bi-annually, on everything from total library-wide expenditures to the number of degreed Librarians or the number of serial subscriptions added. Needless to say, by using these metrics, one may be able to detect various trends and themes in the data, as well as potentially discern the overall health of the library. For this instance, the university library being explored is that of DePaul (Chicago, Illinois), and while there is data from all five reporting years (2000, 2002, 2004, 2006, 2008, 2010), reporting year 2000 leaves much to be desired and thus most analysis will be based on the period 2002 2010 unless otherwise noted. After a discussion of these metrics (all located in the appendix in Table A) with regard to their implications and possible trends and themes, these nascent conclusions will be put into context based upon Harvard Associate Librarian Dan Hazens 2009 article about daunting financial pressures and collection development titled Rethinking Research Library Collections: A Policy Framework for Straitened Times, and Beyond. Discussion: Expenditures and their Corollaries Beginning with Total Expenditures (TE), it is vital that we first note what is meant by this term. TE is essentially money spent during one fiscal year based largely upon the operational budget, which includes such line items as salaries, collection

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Budget and Financial Analysis Exercise development, overhead costs, etc. TE does not include expenditures on large-scale renovations or building projects, which are investments in the future and thus would be found on a capital budget and would be much more rooted in a long-term strategic plan (Stueart and Moran, 2007, p. 439). In 2002, DePauls TE was $7,825,393 and increased to $9,254,982 in 2010. This difference in spending by $1,429,589 over the course of eight years represents an increase of about 18%. However, when one accounts for inflation, this actual increase in dollars spent is not quite as significant (See Table B for inflation rates). In fact, according the U.S. Department of Labors (USDL) Bureau of Labor Statistics Consumer Price Index Inflation Calculator, the Library would have to have spent at least $9,909,256 just to keep up with the rate of inflation (United States Department of Labor, n.d.). While the TE is more in 2010 in actual dollars, DePauls Library spent less after accounting for inflation. Moving on to look at Expenditures per Full-Time Equivalent (FTE) Student, we

find a sharp contrast to the TE in actual dollars as discussed above. This metric is identified by dividing the total library expenditures by the number of FTE Students enrolled at the University. In 2002, Total Library Expenditures per FTE Student were $491.08, versus $470.06 in 2010. While this is less spending per FTE Student, it is clear that this does not constitute the Library as a whole spending less; rather, this is a function of a rapidly growing student body, coupled with inflation. In 2002, the number of FTE Students was 15,935; by 2010 this number grew to 19,689, or an increase of nearly 4,000 FTE Students and thus a growth of about 24%. To once again utilize the USDL inflation calculator, it appears that the Library would have had to spend $595.24 per FTE Student to keep up with inflation. To synthesize all of these numbers, while the

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Budget and Financial Analysis Exercise Library did continually spend more (TE) it did not keep up with the rapid change in enrollment or the rate of inflation, and thus spent significantly less on each student. While one may argue that there are economies of scale here, DePaul is not a massive research institution (albeit one of the larger private schools), and thus would be well served to keep increasing library spending alongside enrollment and inflation. Now that the Librarys expenditures with regard to its primary stakeholders has

been discussed, we may move on to explore trends and themes based on other expenditures. First, looking to Salaries/Wages spent on Librarians and Other Professional Staff, there appears to be a steady rise in dollars spent on human resources. While the number fluctuates throughout the years, in 2000 (data available), the Library spent $1,940,735, whereas a decade later in 2010, that expenditure was at $2,336,772, somewhat slightly under what it should have been when factoring inflation. Looking to the number of librarians employed, the number decreases by only about one, going from 43.71 to 42.03 (granted, there is fluctuation in the years between). However, the number of Other Professional Staff steadily decreases over the years from 4 in 2000 to none in 2010 (note: there are still Other Paid Staff and Student Assistants working in the Library). The removal of Other Professional Staff (potentially para-professionals as well) is not surprising; in fact it is very much in keeping with the trend of streamlining and reorganizing the library, which may have been needed for some time (Stoffle and Cuillier, 2011, p. 131). This is especially true when one considers the redistribution of workloads and workflows created by the transition of serials from print to digital formatssome workers may be retrained, others transferred, and still others may simply no longer be necessary (Glasser, 2011, p.112). To summarize, while salary

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Budget and Financial Analysis Exercise expenditures increased, albeit less than at the rate of inflation, the number of professionals decreased, thus indicating a changing workflow. Now, shifting our focus from people to materials, we may take a look at DePaul

University Librarys expenditures on Current Serials Subscriptions and what it is getting for that money. This expenditure includes all serial subscriptions, regardless of format. In 2002, the Library paid $2,717, 925 for its serials, whereas eight years later, it paid $3,972,003, which is significantly more even after factoring for inflation. This change is even more staggering when one looks to Expenditures: Electronic Serials (included in the aforementioned Subscription expenditure), which increased from $875,862 in 2002 to $2,478,297 in 2010, or nearly 183%. Now, looking to Serials Subscriptions Held, one finds that the library had 9,808 subscriptions in 2002, which increased to 13,215 in 2010. All in all, the number of the Librarys subscriptions did not even double, while the cost of those subscriptions rose exponentially. This is certainly indicative of the serials crisisthe skyrocketing prices of academic journals despite the decreased cost of production/dissemination and free work done by scholars due to the inherent monopoly in such specialized publishing (Varmus, 2009, p. 252-255). Lastly, we may look to Expenditures on Books, Serial Backfiles and Other

Materials compared to the number of Books, Serial Backfiles and other Paper Materials Added. This is one the very few Expenditure categories in which the Library actually decreased its spending. In fact, in 2002 the Library spent $736,570 whereas in 2008 (data not available for 2010) it spent $615,997, thus decreasing by $120,573. The total number of print materials added also decreased, from 30,336 in 2002 down to 10,760 in 2008. While both the number added and the cost for these materials decreased, they did

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Budget and Financial Analysis Exercise not do so at the same rate. While the total number of the materials added decreased by nearly 65%, the cost of adding these materials only decreased by about 16%. There may be a variety of reasons for this contrast, though unlike some of the other cases such as staffing, we cannot absolutely discern the causes based on the NCES data alone. This discrepancy between expenditure and number purchased could be due to fewer but more specialized (and more costly) works being purchased, a shift in collection development patterns toward a traditionally more expensive discipline such as those in the STEM categories, or due to the Serials Backfiles, as we know the exorbitant cost of serials. In sum, this is one area where both the expenditure and number are decreasing, albeit at different rates. Context: Rethinking Research Library Collections: A Policy Framework for Straitened Times, and Beyond In his 2009 article, Harvard Associate Librarian of Collection Development Dan

Hazen boldly states that academic and research libraries are experiencing a crisis in purpose and identity largely due to the rapidly changing nature of collections and thus collection development (p. 116). Due to their own faltering budgets, the rise in cost of serials, and unprecedented changes in the way information is created, delivered, and used & consumed, research libraries must develop new guiding principles and approaches. At the heart of his argument, the Harvard librarian posits that libraries simply cannot afford to continue down the current path due to the volume and cost of information, and must turn to a more cooperative (amongst libraries) strategy. In fact, Hazen goes so far as to suggest, collective action may allow libraries to more fully shape both the landscape and the marketplace for electronic resources (2009, p. 119).

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Budget and Financial Analysis Exercise After suggesting greater cooperation and collaboration among academic/research libraries, Hazen lays out his principles as follows. 1. The future is digital, and libraries need to both embrace and prepare for this. 2. Collection development focus must be broadened to include both owned and not owned materials. 3. Cooperation amongst libraries must be central to any plan. 4. Libraries must engage in reformulating information flows and scholarly communication. 5. Libraries must develop new tools for dealing with born digital information (e.g. digital humanities text mining). 6. All libraries must take on greater responsibility in governance, accountability, and planning. Looking to the NCES metrics, we can most clearly see DePaul as being affected by the serials crisis when examining this greater context of issues facing all academic and research libraries as described by Hazen. The author suggests that the publishers and disseminators behind the serials crisis are electronic gatekeepers [who] create scarcity where none should exist (Hazen, 2009, p. 120). We certainly see this with the dramatic rise in expenditures on serial subscriptions (notably electronic) when compared with the actual number of subscriptions that the library is receiving. Additionally, participating in some sort of collective action as Hazen suggests (however difficult this may be) may indeed give academic libraries like DePaul some sort of leverage in the marketplace. Another area where we may see DePauls library in line with Hazens guiding principles is in building a smaller, more enduring collection of record and supplementing this with a consortia model and/or digital surrogates. This is evidenced by the way the Library decreased both its spending and number of volumes added with regard to its print collection.

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Budget and Financial Analysis Exercise To conclude, the DePaul University Library does fit within Hazens description of what is currently happening to academic and research libraries, as best we can tell from the metrics provided by the NCES Library Statistics Program. Furthermore, it would suit the Library well to follow some of Hazens suggested principles such as greater cooperation/collaboration with other libraries and engaging in changing the way scholarly communication functions.

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Budget and Financial Analysis Exercise Appendix, Table A

Data from National Center for Education Statistics DePaul University, IL Academic Library Characteristics Number of Branch Libraries Academic Institution Characteristics Total FTE 12-Month Enrollment Paid Full-Time Equivalent (FTE) Staff Librarians Other Professional Staff Librarians and Other Professional Staff Librarians and Other Professional Staff Per 1,000 FTE Students All Other Paid Staff Student Assistants Total Staff Total Staff Per 1,000 FTE Students Expenditures Salaries/Wages: Librarians and Other Professional Staff Salaries/Wages: All Other Paid Staff Salaries/Wages: Student Assistants Total Salaries Employee Fringe Benefits Expenditures: Books, Serial Backfiles, Other Materials Expenditures: Electronic Materials Expenditures: Audiovisual Materials Expenditures: Current Serial Subscriptions Expenditures: Electronic Serials Expenditures: Document Delivery/Interlibrary Loan 2000 7 2000 2000 43.71 4 47.71 35 29.95 112.66 2000 2002 9 2002 15,935 2002 39 3 42 2.64 39 32 113 7.09 2002 2004 7 2004 19,014 2004 38.9 3 41.9 2.2 35.7 25 102.6 5.4 2004 2006 6 2006 17,573 2006 39 0 39 2.22 36 20.5 95.5 5.43 2006 2008 6 2008 19,108 2008 36.71 0 36.71 1.92 38.31 33.22 108.24 5.66 2008 2010 6 2010 19,689 2010 42.03 0 42.03 2.13 34.53 23.34 99.9 5.07 2010

$1,940,735 $2,270,958 $2,273,588 $2,227,713 $2,073,785 $2,336,772 $914,396 $317,179 $807,303 $0 $1,017 $1,026,961 $1,063,759 $1,057,158 $1,161,876 $1,212,466 $334,573 $296,106 $328,838 $338,995 $316,598

$3,632,492 $3,633,453 $3,613,709 $3,574,656 $3,865,836 $811,400 $978,796 $1,057,542 $1,167,282 $1,310,090 $736,570 $13,823 $2,007 $772,188 $34,526 $20,390 $579,681 $0 $19,700 $615,977 $0 $21,037 $669,353 $173,615 $24,376

$2,317,885 $2,717,925 $2,677,560 $2,812,925 $3,059,643 $3,972,003 $593,907 $2,837 $875,862 $2,419 $1,061,943 $0 $997,061 $5,063 $1,391,545 $2,478,297 $6,767 $11,690

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Budget and Financial Analysis Exercise

Expenditures: Preservation $80,998 $76,380 $70,535 $60,464 $60,486 $35,445 Other Expenditures for $0 $82,609 $106,477 $193,746 $97,040 $108,437 Information Resources Expenditures: Computer $123,905 $71,934 $132,819 $102,638 $163,395 $94,581 Hardware and Software Expenditures: Bibliographic $143,787 $140,914 $131,439 $113,059 $164,717 $171,519 Utilities, Network, Consortia All Other Operating Expenditures $353,679 $364,150 $316,075 $322,525 $440,971 $326,118 Total Library Expenditures $7,002,704 $7,825,393 $7,840,546 $7,803,810 $8,183,652 $9,254,982 Total Library Expenditures Per FTE $491.08 $412.36 $444.08 $428.28 $470.06 Student Size of Collections 2000 2002 2004 2006 2008 2010 Books, Serial Backfiles and Other Not 25,166 30,336 15,779 29,738 10,760 Paper Materials - Added reported Books, Serial Backfiles and Other 801,321 848,846 876,568 893,231 917,419 912,930 Paper Materials - Held Books, Serial Backfiles, Other 53.27 46.1 50.83 48.01 46.37 Paper Materials Per FTE Student Not Not E-Books - Added 1,356 2,506 2,642 reported reported Not Not E-Books - Held 18,197 23,883 29,351 reported reported Microforms - Added 34,004 20,724 20,724 3,130 466 2,921 Microforms - Held 1,416,531 730,601 282,946 281,691 284,979 291,424 Audiovisual Materials - Added 14,720 1,058 1,058 563 2,635 1,354 Audiovisual Materials - Held 106,161 108,365 27,381 28,581 30,963 33,475 Current Serial Subscriptions - 87 147 80 75 24 486 Added Current Serial Subscriptions - Held 9,808 12,062 12,350 12,258 12,292 13,215 Electronic Reference Sources and 8 47 48 14 Aggregation Services - Added Electronic Reference Sources and 195 261 244 271 Aggregation Services - Held Services 2000 2002 2004 2006 2008 2010 Returnable Interlibrary Loans and Documents Provided to Other 3,557 3,363 3,580 3,697 3,418 Libraries Non-Returnable Interlibrary Loans and Documents Provided to Other 1,022 1,051 937 2,320 2,934 Libraries Total Interlibrary Loans Provided 20,895 4,579 4,414 4,517 6,017 6,352 Returnable Interlibrary Loans and 2,014 2,565 3,025 3,008 2,833 Documents Received

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Budget and Financial Analysis Exercise

Non-Returnable Interlibrary Loans and Documents Received Documents Delivered From Commercial Services Total Interlibrary Loans Received Circulation Transactions (General) Reserve Circulation Transactions Circulation Transactions (Included Reserves) Per FTE Student Number of Presentations Total Attendance at All Presentations Hours Open in a Typical Week Information services to individuals Reference In-person Gate Count in a Typical Week Information services to individuals Reference Virtual Information services to individuals Total Reference Reference Transactions in a Typical Week Information services to individuals Consultations In-person Information services to individuals Consultations Virtual Information services to individuals Total Consultations Total information services to individuals 14,073 385 7,662 100 3,415 2,094 3,696 0 5,710 201,806 13,805 14 408 8,055 100 4,169 1,839 3,535 0 6,100 212,822 14,212 12 406 7,956 100 22,775 1,631 5,527 0 8,552 237,894 14,612 14 399 9,177 100 28,089 1,906 4,443 0 7,451 227,323 13,441 13 452 10,396 102 31,912 1,367 6,221 Not reported 9,054 235,804 5,531 12 438 9,698 105 30,407 33,418 6,777 37,184 Not Applicable 6,870 1,587 8,457 45,641

Table B U.S. Department of Labor, Bureau of Labor Statistics Consumer Price Index, U.S. Cities Average Year Average Change (%) 2000 3.4 2002 1.6 2004 2.7 2006 3.2 2008 3.8 2010 1.6 *source: ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

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Budget and Financial Analysis Exercise Reference List Glasser, S., & Arthur, M. A. (2011). When Jobs Disappear: The Staffing Implications of the Elimination of Print Serials Management Tasks. Serials Librarian, 60(1-4), 109-113. Retrieved from http://ezproxy.dom.edu/login?url=http:// search.ebscohost.com/login.aspx?direct=true&db=lih&AN=60106569&site=ehos t-live&scope=site Hazen, D. (2009). Rethinking Research Library Collections. Library Resources & Technical Services, 54(2), 115-121. Retrieved from http://ezproxy.dom.edu/ login?url=http://search.ebscohost.com/login.aspx?direct=true&db=lih&AN=489 96483&site=ehost-live&scope=site Stoffle, C. J., & Cuillier, C. (2011). From Surviving to Thriving. Journal Of Library Administration, 51(1), 130-155. Retrieved from http://ezproxy.dom.edu/ login?url=http://search.ebscohost.com/login.aspx?direct=true&db=lih&AN=572 25159&site=ehost-live&scope=site Stueart, R.D., Moran, B.B. (2007). Library and Information Center Management (7th). Westport, Conn: Libraries Unlimited. United States Department of Labor. (n.d.). Overview of BLS Statistics on Inflation and Prices. Bureau of Labor Statistics. Retrieved from http://www.bls.gov/bls/ inflation.htm Varmus, H. (2009). The Art and Politics of Science (1st ed.). New York: W.W. Norton.

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