Policymakers around the U.S. confront a 'new normal' period of fiscal crisis at the state and local level forcing them to re-evaluate previously untouched silos in government. Osceola County, Florida is no different. Last year amidst broad budget woes, the county’s library system also faced a $3 million budget deficit forcing policymakers to rethink how they do business.
The public-private partnership model is proven in states like California and Texas where municipalities have partnered with private partners for years to deliver library services. For the first time, this model is being leveraged in Florida. The Osceola County Commission voted 3-2 on Monday December 19, 2011 to turn over management of the county’s six-branch library system to Maryland-based Library Systems & Services Incorporated (LSSI).
In this April 2012 interview with Reason Foundation’s Harris Kenny, Osceola County Commissioner Frank Attkisson discusses the county’s decision to implement a public-private partnership with LSSI for the county’s library system.
Harris Kenny, Reason Foundation: What was the fiscal environment like in Osceola County last year?
Frank Attkisson, Osceola County Commissioner: Local government doesn’t generate revenue the way federal or state governments do, meaning our options are limited during economic downturns. Osceola County is like any other county and we lost significant revenue through the Great Recession.
In Florida, property taxes are one of the only revenue streams local government has, so falling property tax revenue affected our budget dramatically. Meanwhile raising additional revenue through increased tax rates was not politically viable. The millage for libraries was established decades ago, but that millage rate, adjusted down over the years due to competing priorities, has since become insufficient, as the size and scope of library services available to our constituents has grown. Don Fisher, our county manager, then approached the county commission to discuss alternative solutions based on our ability to work together on other major issues.
Kenny: Given that budget context, and the fact that the library system was constrained by a $3 million budget deficit, how did the commission address library services privatization?
Attkisson: Don met LSSI at a vendor booth at the statewide county convention, and he brought the idea back to the commission. A few people gulped. My professional background is in the charter school world. Charter schools have to meet standards, which we enforce through a grading system. What I found fascinating going through this process for the library is that the citizens don’t have established accountability systems for the library, asking questions like, “how many books did we check out? How many patrons are we serving? How are we doing relative to neighboring libraries?” A neighboring library offered fewer hours, but checked out more books. It’s sort of a hodgepodge of how to run libraries without creating standards of excellence.
Kenny: How did the commissioners proceed with procurement?
Attkisson: We simply asked the private sector for ideas on how to run a better library. We put out a Request for Letters of Interest (RFLOI); the first offer, from LSSI, projected $12-13 million in cost savings over 5-years. However one commissioner said he’d only go along if they agreed to offer a job to all 80 employees. We tweaked procurement to include job offers to all 80 employees and received a second bid from LSSI for a five-year, $6 million savings (or slightly over $1 million each year).
How much is the benefit package of government compared with the benefit package of the private sector? 76 employees ultimately accepted those offers to work for LSSI. It cost us an extra million dollars a year in benefits (including pension, healthcare) to have the same employees doing the same job.
Kenny: What evidence did you see in other communities around the U.S. that led you to believe this was the right move for Osceola County?
Attkisson: We are the first county in Florida to partner with a private operator for library services. Some people are intimidated by being first, but when you’re in the middle of a recession, it’s like you’re in a swamp with the alligators. It’s time to get creative and do something. As a politician, I don’t have the ability to make more money or inject economic development that will have an impact in the current fiscal year. To make ends meet we asked, “How do we deal with our budget issues?”
LSSI is the fifth largest library system in the country, including access to materials from the Smithsonian. I went out to the Dallas area and visited three LSSI-operated libraries unannounced. We looked at two libraries in similar-sized counties. I asked to speak to the head librarian, and we walked through political issues and long-term solutions they were able to achieve in Texas.
Kenny: How did the commissioners frame this partnership with their citizens?
Attkisson: People don’t realize that a valuable public service can be provided differently. Does it really matter where an employee gets their paycheck? Of course not. What we should be concentrating on is that this is a government expenditure and we should be able to ask whether it’s running as efficiently and cost-effectively as possible.
One of the issues we had right away is that there wasn’t enough new content on the shelves. Due to uncertainty prior to privatization, our staff suspended ordering new materials in October; they didn’t know if they should keep ordering more materials or end operations. We worked with LSSI to provide new content and were able to successfully complete the transition.
At the end of six months LSSI is going to come in and provide us numbers for how many periodicals, books, etc. we’re getting out the door and see how many people are accessing the materials. We’re excited to have accountability and standards of excellence throughout our library system.
Kenny: The first concern that many people have when it comes to libraries is access. How did the commission address this concern and how might other policymakers address it?
Attkisson: If another commission wants to do this, the boogey man is going to come out and people will try to scare them. Elected officials control these contracts and the public trusts us to deliver value for their money. We (the commission) control the hours and set the standards. We know what it costs and want the private sector to help us realize our vision for our libraries.
The vendor has an option to set up ancillary businesses to provide additional services to users, like a coffee shop. Think about how much has changed in ten years. We didn’t have computers or Internet. Now it’s a given that you’ll have those resources. That’s totally different from the libraries of ten years ago. We were able to leverage procurement to achieve substantive goals.
You have to have the backbone to say it will take 3-6 months to transition. But I’m comfortable that once we do, nobody will want to go back because we’ll have more capability than ever before.
Kenny: Another concern people have when it comes to libraries is control. What sort of latitude do elected officials have to assert their intentions with LSSI throughout the term of the contract?
Attkisson: Updates are a huge part of this partnership. I don’t take this partnership lightly. We actually retained our library director as an employee of the county. His job is to be the contract manager to make sure we’re capturing our value. He’s a former librarian with over 20 years of work experience; we kept him on the county’s payroll to implement the contract and capture value.
The boogeyman will come at you in a variety of ways. At the end of the day, what do you want as an elected official paying for a library? Smiling faces focused on serving constituents getting whatever resources they want as quickly as possible. The name badge and building say Osceola County. Just because the name on the paycheck is different doesn’t mean the quality will change. For example, the boogey man came in the form of threatening state grants. We spoke directly with our secretary of state to clarify that it indeed remains a public library, we’re just delivering services more cost effectively, and state officials dismissed the boogeyman by sending the library a letter ensuring they’re still eligible for state grants. State policymakers are actually considering rewarding innovative local leaders with more state money—not less—for thinking outside the box.
Public employees have special privileges that make it much harder to implement change. I’ve dealt with that as the CEO of a charter school company. Public sector schools have much higher hurdles. If I have 80 employees are they always doing what we want? No, there will be some turnover. Our staff is human. This company can deal with those issues. My job as a county commissioner is to deliver the smiling face behind the counter in the most cost effective fashion. That’s what matters to my constituents coming to the library and getting services. Not whether I attend to low-value administrative matters.
Kenny: In addition to the library system, what other innovative reforms is the Osceola County Commission exploring?
Attkisson: Osceola County recently partnered with the private sector for security in the county jail’s main lobby, courts building and all six public libraries signing a three-year contract saving $726,000 annually. We were the first county in the Orlando Metropolitan Area to put a suspension on our impact fees. If companies like Home Depot and Lowe’s can put a discount on merchandise, why can’t we put a discount on fees to aide the economy?
We’re also looking at reducing healthcare costs and trying to understand what market tools can be applied to drive down costs without reducing quality. We have a commission that’s ready to talk about doing things like employee health insurance differently and not accepting the norm. Our question isn’t: how cheap is health insurance? Instead it’s: who’s out there that can help us save money and do this better? We apply this logic across the board. When you use open bids effectively, you’d be surprised at how creative the private sector can be.
Frank Attkisson is serving his first term with the Osceola County Commission. He currently serves as Chairman for the Small Business Regulatory Advisory Council which reviews state agency rules and their impacts on business. He is Vice-Chairman of the American Board Certification for Teachers of Excellence, which is a national alternative teacher certification board established by Congress in 2001. He has previously served in other local elected offices such as City of Kissimmee Commissioner and Mayor. He was elected to the Florida House of Representatives in 2000 and served eight years until being termed out of office.
Other articles in Reason Foundation's Innovators in Action 2012 series are available online here.