Directors Report for 2005 Annual Meeting

 

 

 

 

 

 

 

 

Reporting Center
The Aleph Reporting Center will be installed on our server as soon as we receive the needed additional disk space, which is currently on order. Once installed, we will ask the Aleph libraries to begin testing.

Booking
We continue to work with Ex Libris and MnLINK to arrive at acceptable specifications for Item Booking and Media Management.  Development continues on the part of Ex Libris.

Version 17
Aleph version 17 was released to us on February 15, and the PALS staff has been devoting time to testing this new version since then.  With the move to version 17, Ex Libris has implemented a significant architecture change.  The new architecture will be carefully tested to make sure that all of the consortium features are working properly.  The date for production use of version 17 will be determined based on the results of the testing and coordination with migration activities.  Putting version 17 into production is expected to consume significant staff resources and a period of downtime for our MnPALS libraries, so it will need to be planned carefully.

Acceptance Testing
MnLINK is gearing up to begin acceptance testing of the 3 outstanding development issues of the Aleph system: ILL, Booking, and the Reporting Center.  They will be inviting staff from our Aleph libraries to participate on the acceptance testing groups beginning in late April.  This work could potentially extend through June, when final payments to the vendor must be made.  Testing for our libraries will be done on our test server using version 17 of Aleph, which is scheduled to include all of the MnLINK contracted functionality.  The U of M will also be doing testing on their server.

Maintenance
We are beginning the process of establishing a maintenance agreement with Ex Libris for the Aleph software.  Maintenance payments are scheduled to begin after a 1-year warranty period, which has not yet begun.

The Budget

A major factor in determining our long-range financial viability is the amount of income we can expect to receive from our member libraries.  PALS income from user fees is again being reduced in FY06 due to the loss of our public libraries, combined with no increase in the total fees received from our continuing members.  These reductions are in addition to our loss of income from our PALS libraries outside of Minnesota.

On the positive side, we have yet to begin maintenance payments to Ex Libris because of delays in software delivery.  Since this is a large budget item, not having to pay it has a significant positive impact on the bottom line.

Although MnSCU/PALS currently enjoys a budget reserve, the combination of significant reductions in income and new financial obligations will result in a budget shortfall in our future if we continue to provide the services we are now providing without increasing our income.  One of the challenges facing us is to find a way to balance the budget before the reserve is depleted.

Services Task Force
The Services Task Force was formed at the Annual Meeting in 2003, with membership composed of MnSCU/PALS Deans, Directors, and Coordinators, to identify areas that could be considered for cost reductions and to look for ways to increase revenue.  The efforts of this task force to date have resulted in the shifting of the costs for OCLC records and BIP from the central office to the libraries, and some success in reducing our costs and preserving our reimbursements in the MnLINK arena.  You may recall that this task force made a recommendation at our Annual Meeting in 2004 to form a group to look at revising our support procedures.  More information on this group is included below.  In looking at ways to increase revenue, the Services Task Force recommended a 7% dues increase for FY2006 to the Executive Committee.  However, that increase did not take place because of limited MnSCU funds.

 

Support Task Force
The Support Task Force was created, as recommended by the Services Task Force, came up with two recommendations, which were approved by the Executive Committee.  They are as follows:

1.  Encourage libraries to follow the support guidelines (of the PALS office) more consistently.

2.  Implement a pilot project as outlined in point three* for those libraries not yet migrated to Aleph for their MnSCU/PALS support. Would require some support from individual campuses’ administration.  The benefit would be to use support service more efficiently and to test a methodology for reducing the reliance on PALS staff for the future when we exist in a more stable support environment.

(*Point three: Use the collective wisdom of the local library staff via discussion lists.)

A mailing is going out to all library administrators, asking for their support in implementing the first recommendation.  A mailing is going out to the libraries in the last group to migrate, asking them to participate in the pilot project described in the second recommendation.

Marketing Task Force
Another task force formed by the Executive Committee was the Marketing Task Force.  This task force has identified the benefits of MnPALS membership, identified potential new members, and conducted a survey to determine interest among Minnesota libraries.  Their work is now on hold pending the development of the mission statement and agreement within the consortium on our future directions and a funding plan.

Hardware upgrades
I reported last year at this time that we were upgrading processors and memory for our Aleph servers.  Since then we have also upgraded the disk system, and we recently ordered additional disks, processors and memory.  To date, we have spent $442,453 on equipment that was needed over and above that specified in the contract with Ex Libris.  There is a possibility that we will receive reimbursement for some of this from the MnLINK appropriation (recent estimates are about $90,000).

Financial Projections
Through the work of the Services Task Force, it has become apparent that we have a limited number of options that would enable us to balance our budget.  We have many expenses that are fixed, including salaries and benefits per individual, facilities costs, hardware costs, and software maintenance.  The two areas where changes could result in a significant impact on our bottom line are reducing central office staff and increasing income.

Some staff reductions have already taken place, and others are planned, due to attrition.  Reductions of technical staff have already been made since development on PALS ceased several years ago.  It is clear that we cannot further reduce staff until we complete the migration to Aleph.  When considering future staff levels, we may be able to justify reductions because of a smaller customer base.  On the other hand, more staff resources are needed to deal with more complexity and more manual processes, at least initially, with the new system.  Current projections for staff levels are shown in the table below.  Without significant increases in income, these projected reductions are not sufficient to produce a balanced budget.

Projected number of PALS Staff devoted to ILS Operations and Support
	FY1999	FY2009	% Difference
Administration	3.00	2.37	-21%
Operations and Technical Services	8.00	4.62	-42%
User Support and Training Services	7.80	5.50	-29%
Telecomm network and PC support	2.00	1.71	-15%
Total	20.80	14.20	-32%

In recent years, we have seen our income levels decrease significantly.  Because of budget reductions to our parent institutions, we have been unable to raise user fees to help offset other income losses.  To top it off, the loss of our public libraries will result in another significant reduction in income from user fees.  One of our “opportunities” is to find an acceptable balance between the services that are needed and an operation that is financially viable.  I will provide additional funding information and future financial projections at the meeting.

 

Conclusion
And so, we do have “opportunities” that are presenting themselves in dealing with new software and the budget.  The consortium membership is changing as are some of the core functions that the PALS office provides.  This set of circumstances puts us in a unique position in our history to step back and look at where we are going.  The establishment of a secure funding base and a clearly defined mission, along with goals, are very positive steps moving us forward to take advantage of the “opportunities” that we have been given.