Information on outsourcing from Hawaii: Denwall

[Pat Wallace <DENWALL@AOL.COM>]

Note:  I am forwarding this to everyone so that you can keep
abreast of the unfolding drama (which looks more and more
like a tragedy) in Hawaii.

Pat Wallace    DENWALL @ aol.com
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Subj:  Information on outsourcing from Hawaii: Denwall
Date:  Wed, Nov 6, 1996
From:  patm@netra.lib.state.hi.us
(Pat Matsumoto, Hawaii State Library-Language, Literature,
 and History Division)
To: DENWALL@aol.com

Our news hit the Library Hotline, Oct. 28th & Nov. 4th issues.
It's pretty accurate description of what's going on here.I hope
you have a chance to read it.  HSPLS stands for Hawaii State
Public Library System.  Joann Schindler is one of librarians
who took on the added duty of maintaining  the HSPLS Home
page

     http://www.hcc.hawaii.edu/hspls/reos.html
     http://www.hcc.hawaii.edu/hspls/reengine.html

She does not have a scanner, so types in most of the info
herself.  We are grateful to her that she does this so that
people like you can tap into the news.  [From]  our homepage
address ........  you click on reengineering and outsourcing
and go to Hawaii Library Conference.  You will find the staff
survey  responses and my memo to Bart Kane as these were
a part of handouts at the conference.  Also Sylvia Mitchell
and Sarah Prebbel's conference notes are included there too.

In case you have problems, try

       http://www.hcc.hawaii.edu/hspls/pmatsumoto.html

You'll find my memo to Bart Kane from there you can get to
Sylvia's for more info.

I think that if we outsourced the technical part and left the
selection duties to librarians, it may have worked here, but
the way whole thing was handled leaves us with many
questions.  We are unhappy with the situation.

Will write again.
Pat Matsumoto
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"Press Conference on B&T Outsourcing
 (October 3, 1996)
and  Subsequent  Statements"

by Pat Matsumoto
Hawaii Library Association Conference
October 19, 1996

(OPEN LETTER TO BE SHARED AT THE HAWAII LIBRARY
ASSOCIATION CONFERENCE-- October 16, 1996)

To: Bart Kane, State Librarian
From: Pat Matsumoto, Language, Literature, & History
Section/Hawaii State Library

     Negative public response to the HSPLS' outsourcing
continues. You spoke of the outsourcing as an inevitable
course of action in the face of a "25% budget cut." Was
the budget cut as fatal as you led the employees and the
union to believe? Or

--were the doomsday pronouncements from the
governor used to mask your own desire to
reorganize HSPLS?

--Why was such a massive and  expensive
project never openly discussed with the staff?

--Why was such a long term, important contract
prepared in such a short time and without any input
from the staff? Were there any savings to justify
the waste resulting from the outsourcing?

The following comments are to refute your statements
to the press on October3, 1996.

1. "Savings achieved in the face of 25% funding cut.........."
(Star Bulletin 10/5/95:B2, Summary to the press conference)

In addition to the already reported problems of duplicates,
unwanted/undesirable titles HSPLS received, there are
growing concerns about staff morale and productivity.
Employees' morale is the lowest, and we are not allowed
to do what we are paid to do. Many highly paid librarians
are placed 2 to 3 level below their class, while continually
 receiving the same salaries as before. Selectors are
continually keeping abreast of the book world, yet our
expertise is wasted or underutilized.

A budget of $1,999,710 ( $730,000 for initial set up fee,
$1,265,170 for 60,419 books) was handed over to Baker &
Taylor by June 7, 1996. The FY 96 expenditure plan indicates
$846,680.81 for library books.  Where did $1,999,710 come
from? Is this combination of state, federal,special funds?
Regardless, FY 96 left a big hole in HSPLS' collection as
hardly any books were added to the collection and no books
came from Baker & Taylor. The first shipment of books
arrived from B&T on July 15, 1996. So far a little over
12,000 have reached us and we find that we waste many
hours of valuable time reporting problems due to the B&T
contract.

2. "Ho`ala been seriously damaged by the State's fiscal crisis
..........which meant a decrease from $24 million to $18 million
of our operating budget including the abolishment of 120
positions...."

It was the budget/contract problem during FY 96 that
damaged Ho`ala (the new HSPLS designation that came
into use after the contract with Baker & Taylor and Dynix)
 Therefore, the figures should reflect the funding decrease
from FY 95 to FY 96. The decrease was $2.6 million,
however, not $6 million and the positions abolished came
to 69 positions, not 120 positions.

The $6 million decrease and the abolishment of 120 positions
may be the case if we backtrack 4 or 5 years, but your
statement is misleading to the press and the public.

 Fiscal Year    HSPLS Budget  Decrease from  FY Positions
                                              previous           Abolished
 FY 96          18,467,770.53   2,616,879.53       *69
 FY 95          21,084,650.06   2,092,166.66        33
 FY 94          23,176,816.72      368,510.64
 FY 93          23,545,327.36

 FY 93 to FY 96               5,077,556.83             102
(Source: HSPLS Expenditure Plan, FY 96 & HSPLS Personnel)
(* one more position abolished due to retirement)

3. "We were able to avoid laying off 124 library employees
and closing of 20 to 24 public libraries......"

The above statement was your main message to the press
in defense of your actions. Is this statement valid? The
HSPLS RIF original plan (in your memo to Russell Okata,
7/26/95) includes the following statement among others:
"Notifies 124 employees of RIF by August 1, 1995. This plan
is based  on the loss of $3.5 million dollars." Notifying 124
employees of RIF is not the same as the "laying off 124
employees." The employees affected by RIF may have had
bumping rights within the state government.

It is our opinion no administration could possibly lay off
124 warm bodies when there were 69 vacant/funded
positions to cut. But this was your way to convince
the governor and the unionto agree to your reorganization
plan, which ultimately led us into outsourcing and massive
redeployment.

The salaries for 124 employees (averaged at $28,226)
total to $3.5 million. Is this how you came up with the plan
to lay off 124 employees? How can you expect us to believe
that the Library System had to absorb 46% of the entire
state layoffs and close 20 to 24 libraries whenless than
1% (272) of the 33,000 state workers were laid off?
As of Nov. 30, 1995 when the final RIF plan and the
layoffs were completed, only 620 vacant positions had
been abolished and 550 filled positions abolished within
the entire state government. Of the 550 employees, 278
found positions within the state. Only 272 people were
actually let go,and 118 of the layoffs, were holding
exempt positions.

So, the actual layoffs for the much publicized state budget
crisis is less than 1% of the 33,000 state
workers. (Source: Human Resources Dept.)

An editorial in the Star Bulletin (Oct.5) states: "....the
savingsachieved, in the face of 25 percent cuts in library
funding, averted the layoffs of 124 library employees
 and the closing of 20 to 24 libraries." The press repeats
whatever you feed them.

Don't you feel that you have the responsibility to inform
the press with facts you can substantiate so that they
can correctly inform the public?

4. "In the face of 25 percent cuts in library funding......."

The funding cut from FY 95 to FY 96 was 12%, not 25%.
It would have been 17% if the funding cut remained at
$3.5 million rather than $2.6 million as it turned out
to be.

Misleading statements about the 25% funding cut,
the 124 employee layoffs and the closing of 20 to 24
libraries were used at your press conference and also
when you bargained with the union on July 26, 1995 to
win its acquiescence to your plan to reorganize HSPLS.

Frightened employees, threatened by a RIF, did
not dare protest or question your statements,
and unfortunately our union was of little help.

 Fiscal Year  HSPLS Budget Decrease from previous
Percent decrease from.............

                     FY               previous FY

FY 96        18,467,770.53     2,616,879.53         12%
FY 95        21,084,650.06     2,092,166.66           9%
FY 94        23,176,816.72        368,510.64           2%
FY 93        23,545,327.36
FY 93
   to FY 96                            5,077,556.83         23%

     (Source: HSPLS Expenditure Plan, FY 96)

5.  "If I accepted the Cayetano cuts and laid off 124
employees, it would have meant that approximately
anyone with eight (8) years of experience or less
would have bumped into another department or lost
state employment altogether"

Your memo, dated July 21, 1995, states that
"according to our contractual agreement with the
union, those of you who have worked for the state
less than two (2) years will be released from your
position.  "This memo was dated 5 days before the
meeting with the governor and the union. This e-mail
memo was a very serious matter. I have to believe
that two (2) years rather than eight(8) years
experience, is the real measure for the reduction of
the library personnel. Moreover, since we have had
 a hiring freeze for a number of years, it is unlikely
that we had 124 employees with less than two (2)
 years of service at that time. Do you not agree?

6. "A recent gift of 1,000 Korean books by a Korean
corporate executive is an example of the type of gift......."

We received 151 Korean books  (books in the Korean
language) and 860 books about Korea in English.

There is a clear distinction between Korean
Books andbooks about Korea, especially when
you are defending your action to the press
concerning the current predicament of the
foreign language collection under the Baker
and Taylor contract.

7. "Why were duplicates fiction titles purchased?
$25,000 was used to purchase current best sellers
and popular fiction titles...B&T did not haveaccess
to our database....." (The Ho`ala News, Oct. 1996)

The duplicate titles Baker & Taylor is sending are
not limited to"current bestsellers and popular
fiction titles." One random check netted
351 copies of nonfiction duplicates.
They are paperback reprints of hardbound editions
already in the collection or hardbound duplicates
with different Dewey numbers or duplicates of
nonfiction popular titles.

The October 15th shipment from B&T includes
164 duplicates of fiction titles, primarily
paperbacks of hardbound editions when we already had
101 copies.  In addition, HSPLS received
132 duplicates of children's books
from the same shipment when 232 copies are in the
collection. The previously mentioned 470 duplicate
fiction books are from one shipment (Aug. 19, 1996)
and those were not all "bestsellers or popular titles."
Almost one fourth (109) of those 470 units are
copyrighted between 1970 to 1994.

There is no visible pattern that fits your explanation
of duplicate books from Baker&Taylor.  The above
random checking identified 1,117 units of duplicates
and Waikiki identified an additional 94 duplicates
which comes to 1,201 units at $25,148.94.  And this
problem continues even after B&T has full access
to our database.

Furthermore, it is hard to believe that Baker & Taylor
could not check HSPLS' holdings as the DRA system
was up until June 1996. Baker & Taylor could have
telnetted to our HSLPS catalog if it had Internet access
or dialed-in if it did not.

8. "3% was the approximate amount spent on reference
materials system widein the past......".

HSPLS spent 14% to 31% of its budget on standing
orders in the past years. Standing order materials
are mostly reference books. Hawaii State Library
spent 27% to 50% of its budget on standing orders.
The 3% figure for reference books is inaccurate.

___________________________________________________
 Fiscal Yr   HSPLS           HSPLS S.O.%        HSL S.O.   HSL S.O.%
                  Budget        (systemwide)       Budget
___________________________________________________

 FY 96
(projection 3,073,000     462,788  15%   537,769  172,193  32%
 only)
 FY 95         2,139,000     556,914  26%   550,719  191,719  35%
 FY 94         1,618,104     506,564  31%   360,649  180,685  50%
 FY 93         2,954,139     421,148  14%   578,439  154,439  27%
(Source: HSPLS Budget Allocation Charts prepared by L. Masumoto)

9. " Increase magazines on-line, full text articles can
be printed for freeby 700 %....."

The Information Access Corp. (IAC) offers full-text
articles from 980 journals. The EBSCO database to
which we subscribed under the DRA system offered
full-text articles from 150 journals. If we had stayed
with EBSCO, we could have had a similar amount of
full-text availability. The EBSCO offers 350, 650 or
1,000 full-text journals on-line. Switching one
company to another does not increase the coverage
drastically as you claimed. Both IAC and EBSCO offer
comparable products at comparable prices. And in
view of the recent serials cancellations, your continual
statement concerning a 700% increase of full-text
journals on-line blurs the current status of the HSPLS
serial collection. All 49 libraries have had to cut their
serials subscriptions at 50%, or limit their subscriptions
to 100 or 50 depending on their size. HSL alone cancelled
618 magazine titles, 11 CD Rms, and 14 newspaper
subscriptions. And the 50% cut at HSL is not over yet
if the fiasco of the standing order problems with Baker
and Taylor continues.

As of this writing LLH is cancelling 22 more serials
titles in order to pick up 7 standing order titles,
and BST might have to cancel 70 plus titles in order
to pick up 12 of their basic standing order titles.


The on-line indexing services, whether EBSCO or IAC,
provide access to some full-text articles, without
the related pictures, cartoons, charts and graphics.
These are in no way a substitute for public access
to a variety of magazine and newspaper individual issues.
The indexing services do not have rights to reproduce
the full-text articles to many of the magazines
indexed.,  The access provided is a very limited one.
Consider, a client uses one terminal to access full-text
articles. The number of terminals do not even come close
to the number of full copy issues cancelled.
What 700% increase?

10. "The contract also establishes performance measures
to insure that a balanced range of materials are purchased
for each library..........."

E-mail from several HSPLS employees expressed
concern about lack of input from the library staff.
There were also e-mail requests for the names
of those who wrote the RFP (Request for Proposal)
and the contract. There has been no answer as yet.

Why was Baker and Taylor the only vendor that interviewed
HSL selectors  (Aug. 1 1995)? Between the August 1 date
and the September 1, 1995 date of the RFP, no other vendor
contacted us. Yet, we know that at least three other firms
responded to the RFP.

Why is this clause in the contract addendum
(March 28, 1996):
       "The state acknowledges and agrees
        that the Performance Targets set forth in
        Exhibit B attached hereto and made a part
        hereof are target goals only and Contract's
        failure to achieve any or all of them will not
        constitute an Event of Default"?

Essentially Baker and Taylor can do as they please.
The performance measures you talk about are
meaningless.

 How can we get a balanced range of materials when the
contract does not require Baker & Taylor to maintain
budget statistics for subject fields? How can we expect
 "a balanced range of materials" when B&T treats HSL
as a whole and ignores section breakdowns?

We've been getting far too many fiction titles and not
enough nonfiction titles. The few nonfiction books that
HSL received for subject fields (e.g. 800s, 900s) certainly
do not show a "balance" within the Dewey field.

Putting too much emphasis on bestsellers(ephemeral demand)
will ultimately result in public dissatisfaction. People come
to the library for more than bestsellers.They value the library
for those materials not easily found in the discount or chain
book-stores.
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Return to HSPLS Home Page or Reengineering & Outsourcing:
The Hawaii Experience or HLA Outsourcing Panel or Sylvia
Mitchell's Presentation
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