ACRL News Issue (B) of College & Research Libraries 894 / C&R L News The Operating Agreement B y J o s e p h A . B o is s é AC RL Past President and J o A n S. S e g a l A C R L Executive Director Commentary on the new “Policies o f the American Library Association in Relation to Its Divisions. ” O ver the fifty years since the establishment of ALA’s first divisions, the relationship between them and ALA has undergone many tran ­ sitions as economic and political forces have driven the Association to reevaluate the financial and governance aspects o f its organization. After the “Dues Transition D ocum ent” of 1976 established the principle that divisions must be responsible for generating the revenue needed to pay their staff salaries and benefits and to operate their program activities, an “Operating A greem ent,” adopted in 1982, defined more specifically how financial re ­ sponsibilities would be allocated. The Agreement wisely specified that it should be re-examined in five years. In the fall o f 1984, the ALA Committee on Program Evaluation and Sup­ port (COPES) began a process of examining the 1982 Agreement, considering its strengths and weaknesses, and preparing a more carefully crafted document to guide the ALA/division relationship. During the past several years, a great deal of energy has been expended by a large num ber of individuals on the development of a new Operating Agreement. News items have appeared in both American Libraries and C&R L News. Any m em ber who has attended either an Annual Conference or Midwinter Meeting has undoubtedly been made aware of the discussions and negotiations which have been going on. Even with all that, however, most members of ALA and its divisions think of only one thing when the O perating Agreement comes to mind: how much overhead will the divi­ sions have to pay? This is an unfortunate circumstance. The O per­ ating Agreement is much more than an agreem ent concerning how much of the indirect costs in­ curred by the divisions will be charged back to them . The Agreem ent attem pts to recognize the symbiotic relationship that exists betw een ALA and its divisions. It recognizes that that relationship is very complex. It identifies organizational values and it does much more. The purpose o f this article is to examine the entire O perating Agreement. The authors have devoted hundreds of hours overtim e to developing the Agreement. Working on the assumption that an inform ed m em bership is a responsible m em ber­ ship, we will examine the process followed and will take each section o f the final version, which was approved by the ALA Council at the Dallas Confer­ ence, and explain it. The process Relatively slow progress was made after the COPES asked division staff to work on a new agreem ent, but by the fall o f 1986, the Preamble and the structure for the recently-approved docu­ m ent were com plete and the new docum ent was much clearer in form and content than its prede- November 1989 / 895 cessor, at least partly d u e to th e experience gained in w orking w ith th e 1982 docum ent. D u rin g this period, ALA leaders b ecam e particularly aware o f growing indirect costs and sought ways to control th em . T h e allocation to divisions o f a larg er share o f th e ir indirect costs b ecam e a m a tte r o f serious concern. By th e N ew O rleans C o nference in 1988, this aspect o f th e A greem ent took on increased im portance and b ecam e th e d om inant issue for discussion. Seeking to establish unequivocally th e econom ic and program m atic im portance o f divi­ sions to ALA an d to g ro u n d th e new A greem ent in a firm philosophical foundation, division an d ALA leaders revisited th e P ream ble and drew up th e values statem ents in th e fall o f 1988. A m eeting o f representatives from each division, th e ALA Executive B oard and th e C O P E S, plus division and ALA staff, was h eld in Lisle, Illinois, in N ovem ber, giving rise to th e e p ith et “T h e Lisle 37,” and exhortations to “Pass th e O p eratin g A gree­ m en t and F re e th e Lisle 37.” T h e m eeting achieved several key agreem ents, ch ief am ong them th e adoption o f th e form at o f th e D ec em b e r 1986 d o cu m en t and tentative acceptance o f a funding philosophy based on m em b ersh ip dues covering “basic” services (defined in th e docum ent) with fees o r o th e r sources covering th e fu ll cost (includ­ ing overhead) o f “non-basic” activities. O ver th e next m onths, th e re followed a flurry o f activity creating models for estim ating th e financial im pact on divisions, individually and collectively, and on ALA. H ea ted discussions su rro u n d ed this activity. At th e M idw inter M eeting in W ashington in January 1989, division boards discussed th e A gree­ m e n t and division representatives caucused, b u t no form al discussions took place. Key m eetings oc­ cu rre d in M arch, w hen representatives o f th e C O P E S m et with division staff representatives, and in April, w hen division representatives h eld a fru it­ ful and harm onious caucus leading to th e sugges­ tion o f several significant com prom ises in a p ro ­ posal to th e C O P E S. A lthough th ese w ere no t accepted, they led to fu rth e r discussions and p o in te d in th e direction o f th e version finally reached. Just before th e Dallas C o nference, new objections w ere raised by th e C O P E S w hich w ere only resolved a t th e Annual C o n feren ce itself. I t is u n fo rtu n ate th a t th e very last stages o f p rep arin g th e A greem ent w ere acrim onious; th e final version reach ed has m uch to co m m en d it. It begins w ith a P ream ble and S tatem en t o f Values. Following a set o f definitions, it sets forth m uch m ore clearly than th e previous ag reem en t w hat th e financial and governance responsibilities are on each side o f th e relationship: w h at ALA provides free o f charge, exactly w h at divisions pay for, and on w hat basis. As th e Dallas m eetin g ap p roached and a final snag occu rred in th e process, few Association m em b ers realized th a t th e arg u m en t resolved th e re c e n te re d aro u n d one sen ten ce in a 19-page, carefully co n stru cted policy designed to guide rela­ tions am ong ALA and its divisions for years to come. I. Preamble T h e P ream b le is a beautiful statem en t o f th e sim plicity an d complexity o f an association with inextricably related parts. ALA is p ic tu red as u n iq u e in its stru ctu re, w ith unity o f governance an d legal existence, b u t serving as a h om e for eleven divisions, each w ith its own responsibilities, goals, personnel, revenue objectives, an d B oard o f D irectors. It describes th e divisions’ responsibility to th e ir m em b ers and th e fact th a t th e service they provide serves ALA as a whole. I t points o u t th a t ALA, by providing space and services to divisions, gives tangible evidence th a t it recognizes divisions’ im ­ portance. T h e relationship is seen as dynam ic and collaborative, w ith a m utuality in relationships, and th e p otential for cooperative w ork am ong units. T h e P ream ble suggests th a t th e new set o f poli­ cies m ust recognize th e contributions w e m ake to o n e an o th er an d th e jo in t n atu re o f th e decision- m akingprocess. Finally, it states, “this d o cu m en t is designed to continue a cooperative fram ew ork in w hich th e inevitable questions o f organizational relationships can be addressed an d resolved.” II. Current Organizational Values of ALA T h ro u g h a careful analysis o f existing ALA docu­ m ents, th e following organizational values w ere identified: 1) Unity, 2) Diversity, 3) Authority, 4) Autonom y, an d 5) Collaboration/C ooperation. W hy are th ese organizational values included in th e O perating A greem ent? Because they recognize th e u n iq u e n atu re o f th e relationship betw een ALA an d its divisions and because they establish w hat o n e m ight call “g round rules.” In th e deliberations w hich resu lted in th e O perating A greem ent, th e parties w ere guided by th e se values. T he values recognize th a t ALA is one organiza­ tio n and th a t uniform policies and p rocedures apply in adm inistrative, personnel, and financial areas. I t also recognizes th a t th e divisions provide a m echanism w h ereb y librarians w ith very diverse interests can becom e involved in th e w ork o f ALA. T h e statem en t rem inds us th a t ALA has d elegated to each division responsibility to rep rese n t th e w hole in certain specified areas. Divisions enjoy a certain am o u n t o f autonom y in th e way they do th e ir w ork an d carry o u t th e ir program s. Finally, ALA an d its divisions w ork to g e th er and m ake use o f each o th e r’s strengths, th e re b y en su rin g th a t the w hole is g rea ter than any one o f its parts. 896 / C &R L News III. Purpose, Scope, Implementation, Review Process, & Definitions T his sectio n o f th e d o cu m en t explains w h at th e A ssociation seeks to achieve w ith th e O p eratin g A g reem en t. It fu rth e r explains th e annual review p ro cess w hich will now be in place an d defines various te rm s re fe rre d to in th e d o cu m en t. IV. Use of ALA Services T his section lists services p ro v id ed by ALA w hich divisions are re q u ire d to use. T his includes te le p h o n e , p erso n n el services, m e m b ersh ip serv­ ices, insurance, p urchasing, fiscal services, legal counsel, archives, an d A LA -ow ned o r leased space. V. Financial A. Dues. T his p ara g ra p h recognizes every divi­ sion’s right to establish d u es an d to establish m em b ersh ip p erq u isites for its m em bers. B. Council A ctio n s w ith Fiscal Im plications. W h en ALA’s C o u n cil assigns a task to a division, C O P E S an d th e division b o ard will review th e assignm ent an d re p o rt back to Council. C ouncil may th e n rec o m m en d a b u d g etary ad ju stm e n t for th e division. In essence, this sta te m e n t recognizes th a t it costs a division m o n ey to carry o u t such assignm ents an d th a t C ouncil m u st acknow ledge this. C. Services a n d Charges. T h is is a v e ry im p o rta n t p a rt o f th e O p eratin g A g reem en t an d o n e aro u n d w hich som e o f th e m ost intensive discussion took place. T h e first section en u m e ra te s th o se item s w hich ALA provides to th e divisions a t n o d irec t charge. F o r instance, office space, ce rtain te le ­ p h o n e services, basic fu rn itu re re q u ire m e n ts, p e r ­ sonnel services, storage an d w areh o u se space, staff travel costs, an d p e r diem for th e tw o m ajo r ALA m eetings each year, e q u ip m e n t for m eetings and program s a t co n feren ce, various services p ro v id ed by th e Fiscal Services D e p a rtm e n t, th e W ashing­ to n O ffice, th e various p ro g ram offices an d th e H ea d q u arters Library. T h e seco n d section identifies th e services for w hich ALA charges divisions th e actu al costs. This includes, am o n g o th e r things: c e rtain te lep h o n e services such as long distance calls, specialized d ata processing, p rin tin g a n d duplication, an d postage for special mailings. It explains h ow an d on w h at activities o v erh ead charges will b e p aid by th e divisions. T h e o v erh ead ra te will b e se t annually. O n incom e from divisional co n feren ces, w ork­ shops, institutes, etc., th e divisions will pay 100% o f th e ALA in d ire ct cost rate. H ow ever, th e im posi­ tion o f th o se charges will b e im p le m e n te d over a five y ear perio d : 1989-90, 0%; 1990-91, 50%; 1991-92, 50%; 1992-93, 75%; 1993-94, 100%. This will give th e divisions tim e to p lan an d work th e costs in to th e ir charges for th e se services. O n in co m e from n e t sales o f m aterials, advertising, subscriptions, an d publications, o v erh ead will be assessed at 50% o f th e ALA rate. This charge will b e im p le m e n te d in eq u al annual in c re m en ts o ver a five-year p erio d . A C R L will pay th e full 50% r e ­ la ted to Choice im m ediately. T h e divisions will also pay d irectly fo r ce rtain expenses previously consid­ e re d as in d ire ct ALA co sts. T h ese in clu d e su b scrip ­ tio n an d o rd e r billing services an d C e n tral P ro d u c ­ tion U n it services. T h ese charges will b e levied b e ­ g inning in 1990-91. E xpenses in c u rre d for th e D ivision L ead ersh ip E n h a n c e m e n t P ro g ram an d Awards p ro m o tio n will b e sh a re d by ALA a n d its divisions. T h e divisions m u st assum e total financial r e ­ sponsibility for division p erso n n e l costs, all division projects unless o th erw ise specified in th e O p e ra t­ ing A g reem en t, th e w ork o f co m m ittees an d sec­ tions, an d any e q u ip m e n t over w hich a division w ants to have sole co n tro l an d use. Lastly, a division may p u rch a se services an d /o r p ro d u cts from o th e r ALA u n its an d o u tsid e ag en ­ cies, co n sisten t w ith ALA policy. D. F u n d Balances. T h e O p eratin g A g reem en t recognizes th a t divisions m ay b u ild fu n d balances, b u t states th a t th ey will receive no in te re s t on those funds. Som e have asked a b o u t th e rationale b eh in d fu n d b alan c es. A fu n d b alance allows th e organiza­ tio n to p ro c e e d from o n e y ear to th e n ex t w ithout w orrying a b o u t w h at will h ap p e n if in co m e s u d ­ d en ly takes a plu n g e. T h e fu n d b alance is a reserve o n w hich th e Association can draw if th e re is a su d d e n d ro p in m em b ersh ip , if a co n feren ce proves to b e a m oney-loser, o r if som e o th e r unex­ p e c te d p ro b lem results in a drastic red u c tio n in p ro je c te d in co m e o r in crease in expenses. E. E n d o w m en ts. Som e divisions have m odest en d o w m en ts. T h e O p eratin g A g reem en t e n c o u r­ ages divisions to establish an d b u ild endow m ents. I t allows divisions to tra n sfe r funds from existing balances o n ce th e y have estab lish ed a m inim um fu n d balance. T h e in co m e from such en d o w m en ts is co n tro lled by th e divisional b o ard an d is n o t su b je ct to any o v erh ead costs. F. F urniture. ALA will p rovide basic eq u ip m e n t to ea ch reg u lar division staff m em b er. This section recognizes th a t a division may p u rch a se som e o f its ow n e q u ip m e n t and, if it does, it retain s total co n tro l over th a t e q u ip m en t. I t also describes th e various ways by w hich e q u ip m e n t m ay b e p u r ­ ch ased by divisions. G. D ivisio n B u d g et Review . D ivision boards have th e responsibility to p re p a re b u d g ets and financial plans. T h ese are review ed by ALA m an ­ ag e m e n t an d C O P E S . T h e last stage o f th e review pro cess takes th e m to th e ALA E xecutive B oard for its approval. November 1989 / 897 H. Divisions w ith Small Revenue Bases/Num ber o f Members. Recognizing th a t certain divisions have a small base oí revenue o r a small n u m b e r of m em bers because o f th e ir particular specialty, and th a t divisions are established by Council to carry ou t specific responsibilities, b u t th a t all divisions m ust have staff and m ust provide basic services, the A greem ent acknowledges th a t ALA has som e obli­ gation to supplem ent division financial support. This section specifies th a t such support is to be p art o fareg u larp lan n in g p ro cess and describes how th e exact am ount o f th e ALA assistance w ould be determ ined. E ach division m ust generate at least 50% o f th e funding req u ired to provide basic serv­ ices. I f it is unable to do so for two consecutive years, th e Executive Board will consider its status as a division and refer action to Council. C areful attention was given to th e question o f non-dues revenue. ALA G eneral F unds will not b e used to offset expenses associated w ith generating such revenue, b u t divisions may retain th e n e t revenue. I-J. Association Finances an d Other. T hese sec­ tions state th at ALA will keep divisions inform ed about its own general financial condition and in­ volve them about m atters w ith p o tential im pact on divisions, collectively o r individually. Theyprom ise effective credit and collection policies, w hile estab­ lishing division responsibility for th e ir bad debts an d u n related business incom e tax. VI. Publishing Activities This section establishes th e ways a division may publish materials: through ALA Publishing, on its own, o r through an outside publisher. I t states that a division m ust offer m aterial p rep a re d for oth er th an its own publication to ALA Publishing for first consideration, b u t may accept o r reject th e ALA offer. It also points ou t th a t divisions may purchase services, such as production and distribution or marketing, from appropriate ALA Publishing units. It acknowledges division rights to negotiate royalties for its publications through an “In tra ­ m ural A greem ent o f Publishing Responsibility.” ALA is given sole right to reco rd an d m arket tapes o f conference program s, for w hich divisions r e ­ ceive royalties. Divisions may reco rd an d m arket tapes o f o th e r activities. VII. Personnel All division staff m em bers are ALA em ployees and subject to ALA personnel policies. Divisions m ust generate th e revenue to pay th e ir staff salaries an d benefits. Division Executive D irectors hold senior professional positions at ALA and have appropriate and reasonable ALA responsibilities; they also m eet to g eth er regularly to com m unicate, cooperate, and coordinate division activities. ALA P ersonnel policies d eterm in e th e grade level o f positions; division Executive D irectors and boards d eterm in e appropriate staffing p attern s, in consul­ tation w ith th e ALA Executive D irector. Division directors’ recruitm ent, appointm ent, and term in a­ tion involve consultation by th e division b o ard and th e ALA Executive D irector. Perform ance review o f division directors is an annual process th a t uses a set o f goals agreed u pon by th e director, th e divi­ sion board, and th e ALA D ep u ty D irector. Selec­ tion, evaluation, and term ination o f o th e r division staff is u n d er th e authority o f th e division director, consistent w ith ALA P ersonnel policies and p ro ce­ dures. VIII-X. Division National Conferences, Preconferences, and Related Activities; Annual Conference and Midwinter Meeting; and Special Projects of Divisions T hese sections recognize a division’s ability to engage in various activities to en h an ce its program ­ m ing and services to m em bers. T hey specify the conditions w hich m ust be followed in these areas. W ith resp ect to Annual C onferences and M idwin­ te r M eetings, th e docum ent specifies how ALA ■will assist in making activities at those sessions possible. XI. Planning Divisions have autonom y in planning, b u t are expected to develop and im plem ent a planning process th a t includes b o th m ulti-year program and financial plans. T hey are given responsibility to assist and inform th e ALA Planning C om m ittee by sharing th ese plans on a regular basis and by con­ tributing to th e Action Inventory. Conclusion As we stated at th e outset, ALA is an enorm ously complex organization. I f th e relationship betw een th e Association and its divisions is to rem ain harm o­ nious, it is im perative to have clearly enunciated policies and procedures w hich govern th e relation­ ship and th e interaction w hich takes place. E arlier O perating A greem ents b egan th a t process. T he c u rren t d o cum ent goes considerably fu rth e r than its predecessors in clarifying th e relationship and in explaining th e rules w hich b o th players will follow. T h e developm ent o f this O perating A greem ent involved many o f th e Association’s m em bers. It represents th e bringing to g eth er o f diverse threads into a solid chain w hich links ALA and its divisions and allows th em to function harm oniously and effectively as th ey strive to achieve th eir goals. ■ ■