BusinessTN

Library Systems & Services created a stir in 1997 when it contracted to manage a public library in Riverside County, Calif. The American Library Association formed a task force to assess the new outsourcing threat, and LSSI head Frank Pezzanite later complained that some considered his company “the Darth Vader of the industry.”

Since then, Maryland-based LSSI has made modest inroads into public library management—especially in Tennessee, where four suburban libraries once part of the Memphis-Shelby County system account for a third of its contracts.

LSSI likely would be the winning bidder if the Jackson-Madison County Library board clears legal hurdles to outsource the system’s management, raising concerns about the accountability of a for-profit company running a publicly funded system. While LSSI’s bid assumes a fixed operations budget, it recommends a significant—and some say unworkable—reduction in full-time staff. Pezzanite says the recommendation reflects analysis of library traffic and circulation. He also concedes that leaner operations increase his profit margin. “There’s not a government agency that doesn’t buy supplies and services from for-profit companies, and they’re never worried about what kind of profit is made, as long as the service is what’s expected for their dollar,” he says.

LSSI may benefit libraries newly divorced from larger systems. In Riverside County, where a shifting population and tax structure once drained library funding, an independent system has seen steady increases in per-capita spending, hours of operation and branch locations. And Germantown and Collierville, which exited the Memphis system empty-handed, were operational within weeks.

But the Jackson library would bring to the public/private marriage its dysfunctional family: warring city and county governments that mete out 95% of the library’s budget, each determined not to outspend the other. Library director Thomas Aud estimates he’s had more than $1 million in funding requests denied over the past seven years; a needed branch remains unfunded 14 years after land was donated.

Pezzanite advocates “plural funding,” supplementing tax dollars with pledge drives and corporate sponsorships. Even without alternate funding, he says, streamlining would enable LSSI to, earmark 20% of the library’s budget for materials, as mandated by the library board.

Aud’s proposed budget for 2006-07 also meets that mandate—one never discussed, he says, until the board’s Request for Proposals came “out of the blue” in February. In fact, the RFP may be less about the library’s chronic underfunding than about politics. Outgoing board vice chair Ed Henderson predicts that new board appointees will seal the deal on outsourcing—and LSSI may get more than it bargained for.