Expense Cuts Allow ALA to Partially Restore Staff Furlough Loss

October 30, 2009

ALA Executive Director Keith Michael Fiels announced this morning at an all-staff meeting at ALA Headquarters in Chicago, that expense reductions during the last six months of FY2009 (which ended August 31) had exceeded target and resulted in a modest surplus that would be used to return about half of the money all ALA employees lost during a mandated week of unpaid furlough, which amounts to about $650 per employee.

Fiels noted that this year there would be no money for annual pay raises or individual incentives and that the $650 payment would not be enough to compensate completely for the furloughs but would benefit employees with the lowest salaries most, since every staff member would receive the same amount. There was enthusiastic applause.

Fiels also acknowledged that what has happened to the U.S. economy is no secret to anyone, but news that the economy is out of recession is no cause for celebration yet. “I’m happy for the economy,” he quipped, but there is no forseeable relief for libraries until 2012. The next two years will be lean; libraries are cutting expenses, cutting staffs, and threatened with closure. The impact on ALA is clear. He added that furloughs for 2010 are still on the table, but no final decision would be announced until April, when the FY2011 budget is in place.

The other good news for ALA staff was that no increase in the employee share of health insurance costs is anticipated for 2010.

Fiels then commended staff and expressed the appreciation of ALA President Camila Alire and the Executive Board.

In a separate statement prepared for ALA member leaders, Fiels and ALA Treasurer Rod Hersberger explained the decision to pay back part of the furlough money. Their statement in its entirety:

“Last April, the Association was forced to take a number of extraordinary measures in light of the fiscal crisis that began last fall. Facing a projected revenue shortfall of nearly $3 million, we instituted a series of cost cutting measures that included spending cuts, a one week staff furlough, and the elimination of a number of positions at ALA.

“We are pleased to report that, based on preliminary year-end figures, these efforts were successful.  Thanks to the cost cutting measures implemented in April, we were able to end the year with a balanced budget and small surplus despite a revenue shortfall that did ultimately hit $3 million. This outcome has allowed us to provide some one-time, partial compensation to furloughed staff, and to make a modest contribution to the Association’s reserve.

“This year-end news is particularly welcome because all indications are that the next two years will be very difficult for libraries, our members and the Association. For 2010, we have already implemented additional spending reductions in anticipation of further revenue softness. With library budgets all over the country being cut and furloughs, hiring freezes and travel and materials budget reductions common occurrences, we anticipate a further decline in overall revenue before the situation for libraries and the Association stabilizes and ultimately rebounds.

“Even more encouraging is that, despite the economy, we had record-breaking conference attendance in Chicago, and do expect to have very successful and well attended meetings and conferences in Boston and Washington, as well as successful AASL and PLA conferences this year. Our membership, while slightly down,  is remarkably stable in an environment where many associations have seen dramatic drops. Advertizing, which suffered most dramatically last year, has stabilized.

“Most importantly, we believe that the Association has been able to maintain a strong focus on serving libraries and our members. Despite budget cuts, we have continued and will continue to move ahead on important initiatives such as ALA Connect and those related to increased advocacy for libraries The first and foremost goal will continue to be service to members, libraries and the public.

“More detailed information on the 2009 and 2010 budgets will be provided as part of the Treasurer’s report at Midwinter; this report will also be distributed to the membership at that time.”