Unit Managers heard it this morning for the first time as a group, when ALA Executive Director Keith Michael Fiels announced that the Association would attempt to close a projected $1.6 million shortfall in the $27 million FY2009 general-fund budget by, among other things, eliminating 10 staff positions and imposing a three-day payless furlough and other vacation rules on remaining staff to save a targeted $500,000 by the end of the fiscal year, August 31. Fiels hopes the Association can fill the remaining gap by tapping into ALA reserves. Upper management and the Executive Board began intense and frequent discussions about revenue almost immediately after the national economic crisis hit, knowing that it would inevitably trickle down to libraries and to ALA. Fiels pointed out that the drop was precipitous; the financial picture this month looks totally different from the way it looked last September. He said it was essential that management move quickly if the '09 budget is to be balanced. A 3% across-the-board expense cut had already been implemented earlier this year. An hour and a half after the managers meeting, Fiels explained the situation at an all-staff meeting, noting that in addition to the three unpaid days, Memorial Day and the Fourth of July would be unpaid holidays in 2009. In addition, any vacation days not used by the end of August will automatically convert to sick days; the practice of carrying vacation days over into the next fiscal year will be temporarily suspended. The vacation days and unpaid furlough days will be scheduled in consultation with the supervisors of individual units in order to spread them out over the remainder of the fiscal year. In addition to the 10 positions to be eliminated, an additional six will be unfunded in 2010. The need for these drastic measures was not questioned at the unit managers meeting or the staff meeting. Foremost on everyone's mind, of course, was the question of what positions will be cut, and that information has not been made public, both out of respect for the employees' privacy and the desire of ALA as an employer to handle each affected individual in a caring and humane fashion. The staff cuts are expected to be made within the next two weeks. We all knew it was coming, especially those of us in Publishing who have been watching the economic debacle unfold at newspapers and publishing houses across the country. ALA Publishing has been hardest hit of all ALA revenue-generating units, with advertising down 30%. Although ACRL had a successful division conference this month and registration is strong for the ALA Annual Conference in Chicago this summer, they cannot make up for the decline. Membership loyalty is also a big factor, but the fastest growing membership category (student), although a great sign for the future, also does not generate enough revenue to address the current situation. Print publication of the ALA Handbook of Organization will also be suspended. The text of the Fiels' all-staff memo:
Over the last month, we have been updating our budget projections for the fiscal year that ends on August 31, 2009.
The good news is that registration for Annual conference is strong, and even ahead of registration for last year at this point, and we expect a very exciting and successful conference in Chicago in July. Membership also remains strong and steadily growing, and every dollar in member dues is matched by revenue from publishing, conferences, grants, overhead recovery and income from the endowment.
Everyone is aware, however, of the current economic situation and its impact on libraries, businesses, and other non-profit organizations. Given the state of the economy and library budgets nationwide, it will not come as a surprise to everyone that we are now projecting a net revenue shortfall in the ALA general fund of over $1.6 million.
Because the financial picture has changed so quickly since the beginning of the fiscal year, and because we must reduce expenditures in anticipation of this shortfall, we are going to have to take some unusual measures to reduce salary-related expenditures for the remainder of the year. Specifically:
1. Any vacation days not taken as of the end of August will automatically convert to sick days. No vacation days will be carried over in to 2010.
2. Memorial Day and the Fourth of July will be unpaid holidays in 2009.
3. Each employee will be required to take three additional unpaid furlough days between now and August 31st. These days need to be scheduled in consultation with your Unit Manager so that we can 1) spread out the impact of the reduction on employee income and 2) reduce the impact on member services and unit operations.
Implementation of these three measures will result in general fund savings of approximately $500,000. Our current plan calls for the remainder of the shortfall to be made up through other cost cutting measures, adjustments and use of ALA general fund reserves.
Please note that these measures apply to all ALA staff and all ALA units, including grant funded employees and full-time contract staff.
In anticipation of our lowered revenue estimates, the Association will also be eliminating approximately ten positions between now and the beginning of FY 2010, and will also be leaving an additional half dozen positions unfunded in 2010. In each instance, we will be making every effort to minimize the impact of any cost-cutting measures on staff as well as services to members, libraries and the public. By preparing a 2010 budget that reflects a balance between expenditures and our adjusted revenue expectations, we should hopefully provide for a more stable environment in the coming year.