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Steering Committee Recommendations on Consolidation Options for the Charlotte Mecklenburg Library

 

Recommendations Summary

The Committee determined that consolidating/outsourcing Library functions and services to Mecklenburg County would result in moderate costs savings, enhanced efficiencies and greater operational support capacity for the Library. Consolidating/outsourcing would result in estimated annualized costs savings of approximately $290,160 (primarily from consolidating HR functions and Public Information/Communications functions), while maintaining or enhancing the level of service currently being provided by Library resources. Although these cost savings are moderate in size relative to the overall annual budget of the Library and Mecklenburg County, they would enable ongoing annual cost avoidance/cost efficiencies in subsequent fiscal years as well. In addition, consolidation/outsourcing to Mecklenburg County would enable the Library to leverage these economies of scale to enhance its operational capacity to support its core functions in serving Library customers. A summary of the recommendations by function/services is below.



Financial Management 
 

Full consolidation (i.e., the Library outsourcing the financial management function to the County) is not feasible at this time. Other individual opportunities for cost efficiencies through consolidation/outsourcing are limited. Full consolidation/outsourcing to the County would be feasible and cost-effective if the County were to change to a financial system that enabled running financial reporting and statements of two separate organizations or if the Library were to become a department of Mecklenburg County. The latter requires changes in state legislation.

 

Human Resources

There are cost-effective opportunities to consolidate/outsource the Library’s HR services to Mecklenburg County’s HR Department. If the Library consolidated/outsourced HR services with Mecklenburg County, costs savings could occur through the elimination of a Library Training Coordinator and a Library HR Specialist position. Total savings to the Library for these positions would be approximately $137,478.24. Two current Library Hr positions (HR Manager and HR consultant) would be transferred to the County’s HR Department. These resources will be used along with other County HR staff to provide the Library HR services consistent with the variety and level of HR services being provided at this time. The role of the County HR Department would be to manage the Library’s HR policies and processes on behalf of the Library. In this arrangement, the Library would retain the responsibility and decision-making authority to hire, discipline, and reward its employees.

 

 
Information Technology  

The Committee recommends consolidation/outsource of several IT functions of the Library to Mecklenburg County’s Information Services & Technology Department (IST). Mecklenburg County IST has committed to providing the level of services that is the same or better than the current level of IT services and functions being provided by the Library’s IT staff at this time. Given the leanness of the Library’s IT department, consolidating/outsourcing would produce no immediate costs savings. Typical IT consolidations incur costs in the front years as an investment in achieving more efficiency and costs savings in later years. Therefore, costs savings should not be the primary consideration in evaluating this recommendation. Mecklenburg County IST does not have any immediate plans requiring added costs. The Committee determined that enhanced capacity and better service is a more realistic outcome to consolidation/outsourcing in this area. With projections of constrained budgets and increasing technology demands in the near future, increased capacity and service is the primary driver for this recommendation. Over time, this will enable increased cost avoidance as well.

 

Capital Projects Management  

The Committee concluded that capital projects management seems to be out of scope of the Library’s core mission. However, the Mecklenburg County’s Real Estate Services (RES) has the experience, expertise and resources to provide complete project management services to the Library. The recommendation is to outsource this function to RES. Since there are no major capital projects in the near future, costs savings may or may not exist for outsourcing at this time. However, efficiencies may be gained by reassigning Library staff currently performing these duties to other areas core to the Library’s mission. Some costs savings may exist for the Library, if not all of the current staff performing these services are needed in the future.

 

Public Information/Communications  

The recommendations for these services/functions are divided into two sections. The first section pertains to functions that are within the Library’s Marketing & Communications unit (M&C) but are not core to a marketing and communications mission and/or functions in M&C that are not aligned with functions provided by the Mecklenburg County’s Public Service & Information Department (PS&I) . For these functions, the Committee recommends shifting these responsibilities either to other areas of the Library (e.g., maintaining library supplies/library cards, library signage, fund raising support), outsourcing to private vendors or to PS&I (e.g., fund raising communication support) or consolidating/outsourcing to the County’s IST Department (web applications).

The second section pertains to M&C functions that are core to marketing and communications and are common with PS&I. For these functions, the Committee recommends fully consolidating/outsourcing M&C to PS&I. Two options for consolidating/outsourcing are recommended, both achieving annual cost savings of $152,682. In either option, consolidating/outsourcing would result in the elimination of two of the four M&C positions (public information specialists) providing these services. The two remaining positions, along with existing PS&I resources, would provide services to meet the Library’s marketing and communications needs at the current level. The variation in the two options provided involves a choice about whether the Library’s current M&C director (deputy director I position) remains a Library employee or is transferred to PS&I.

 

Conclusion  

The Steering Committee performed a significant amount of due diligence in a relatively short period of time. There appears to be moderate costs savings, greater efficiencies and greater capacity that could be gained by outsourcing and consolidating services between the Library and Mecklenburg County. Functional areas that are non-core to the Library will be easier to transition to a consolidated/outsourced model. For areas that are core to the Library, careful consideration of the alternatives will have to be considered. Ultimately, decision makers will have to balance organizational need with constrained budgets in making their final analysis.
If recommended consolidation/outsourcing occurs, it would be reasonable for the Library Director to reassess the leadership structure within the organization. Because the consolidation/outsourcing would result in changes in resources and oversight needed, corresponding changes and realignment of leadership reporting and reporting structure would be warranted. Since this reassessment is beyond the scope of the Committee, it was not addressed in this analysis.

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