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www.smwlaw.com

RACHEL B. HOOPER Attorney hooper@smwlaw.com

396 HAYES STREET, SAN FRANCISCO, CA 94102 T: 415 552-7272 F: 415 552-5816

July 7,2010

Via Electronic Mail (without exhibits) and Federal Express

Chairman Villapudua and Members of the San Joaquin County Board of Supervisors 44 N. SanJoaquin Street

Sixth Floor, Suite 627

Stockton, CA 95202-2931

Re: Request for Proposal (RFP # 09-40) for Stockton-San Joaquin County Public Library Operation Services

Dear Chairman Villapudua and Members of the Board of Supervisors:

On behalf of the Concerned Citizens Coalition of Stockton ("Coalition") and Friends of the Stockton Public Library ("Friends"), we have reviewed San Joaquin County's Request for Proposal (RFP # 09-40), which was issued in conjunction with the City of Stockton 1 in order to effectuate the privatization of the 100-year old Stockton-San Joaquin Public Library System ("Project"). We submit the following comments in order to urge the County to seriously consider both the legal ramifications and the impacts to the citizenry that would result from the dramatic step of privatizing the library system, before proceeding with any action on this RFP.

As set forth in further detail below, the Coalition and Friends believe that the County must analyze the Project's impacts pursuant to the California Environmental Quality Act ("CEQA"), Public Resources Code § 21000 et seq., and the CEQA Guidelines, California Code of Regulations, title 14, § 15000 et seq. ("Guidelines"),

1 For the purposes of this letter, we assume that only the County is proposing to take action on the library privatization. However, if the City also proceeds with a privatization contract, the points raised in this letter would apply equally to that action.

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before any action is taken to execute a contract pursuant to the RFP. Approval of a privatization contract is a discretionary action carried out and approved by a public agency that may cause either a direct, or reasonably foreseeable indirect, physical change in the environment, for which there is no statutory or regulatory exemption. Therefore, the proposed privatization is subject to CEQA.

Under CEQA, an environmental review process and document will allow the County-and the public-the opportunity to identify detailed information about the effect the privatization will have on the environment and the community, to list ways in which significant effects of the Project might be minimized, and to allow the County to identify alternatives to the Project. As such, CEQA review protects not only the environment, but also informed self-government.

Furthermore, the Coalition and Friends believe there may be other legal ramifications resulting from privatization of the library system, including, but not limited to, those arising under State law regarding libraries, Education Code, sections 18010 et seq. and Government Code section 26150 et seq.; the California Planning and Zoning Law, Government Code section 65300 et seq.; the California Public Records Act, Government Code section 6250 et seq.; and the Brown Act, Government Code section 54950et seq. Each of these is discussed in further detail below. The County should carefully analyze the Project's compliance with these and other applicable laws and to provide this analysis to the public for comment, either separately or as part of its CEQA document.

Finally, we urge the County to carefully evaluate the policy implications of transferring operations of the public library system, a valued community service, to a company solely motivated by profit generation. The difference between public-interest and for-profit motives is profound, and outsourcing to a private company can result in negative economic, social, and cultural impacts to the community. As the City is aware from its difficult experience in the privatization of its water system, outsourcing can have many unanticipated pitfalls and should not be undertaken lightly. Moreover, there are many documented examples of the negative impacts caused by previously attempted library privatizations in California and throughout the nation. These include privatizations involving Library Systems and Services, Inc. ("LSSI"), a Maryland-based company that has a virtual monopoly in the library privatization business and that is undoubtedly proposing to contract for the Stockton-San Joaquin pubic library system. We discuss these failed privatizations in more detail below.

Given these negative impacts and the fundamental inconsistencies between public library values and a private company's profit motive, the Coalition and Friends strongly oppose the privatization of the Stockton-San Joaquin library system and

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respectfully request the County cancel the RFP. However, if the County proceeds with its consideration of privatization proposal, we urge the County to follow the process required by CEQA and other applicable laws. It is only by a thorough and public evaluation of the Project's legal, environmental, and public policy consequences that a proper and well-informed decision can be made.

DISCUSSION

I. The County Must Review the Privatization Project Under CEQA, and Such Review Will Promote Sound Decision-Making.

A. CEQA Applies to the Proposed Privatization Project.

The Legislature enacted CEQA to "[e]nsure that long-term protection of the environment shall be the guiding criterion in public decisions." (No Oil, Inc. v. City of Los Angeles, 13 Ca1.3d 68, 74 (1974).) The California Supreme Court has repeatedly held that CEQA must be interpreted so as to "afford the 'fullest possible protection' to the environment." (Wildlife Alive v. Chickering, 18 Ca1.3d 190, 206 (1976) (quoting cases).) Therefore, the proper interpretation of CEQ A is one that will impose "a low threshold requirement for preparation of an EIR." (No Oil, 13 Ca1.3d at 84.)

CEQA establishes a three-staged process that requires the preparation of an EIR "whenever a public agency proposes to approve or to carry out a project that may have a significant effect on the environment." (Laurel Heights Improvement Ass 'n v. Regents of Univ. of Cal. , 47 Ca1.3d 376, 390 (1989).) First, the agency must determine whether the particular action is a "project" covered by CEQA, and if it is, whether the project falls within one of CEQ A's limited exemptions. (No Oil, 13 Ca1.3d at 74.) lfit is covered by CEQA and not exempt, the agency must proceed to the next stage and conduct an initial threshold study. (Id.; see Pub. Res. Code § 21080(c).) Finally, if there is substantial evidence in light of the record before the agency that the project may have a significant effect on the environment, an EIR is required. (Pub. Res. Code § 21080(c).)

CEQA applies whenever an agency proposes to "approve" a discretionary "project." (Pub. Res. Code § 21080(a); Laurel Heights, 47 Ca1.3d at 390.) "Project" is defined "extremely broadly" to include "an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment," and is carried out or authorized by any public agency. (Azusa Land Reclamation Co., Inc. v. Main San Gabriel Basin Watermaster, 52 Cal.AppAth 1165, 1188 (1997); Pub. Res. Code § 21065.) The term "project" applies to the "whole of an action" which has a potential for resulting in a direct or reasonably foreseeable indirect change in the environment, including, for example, both activities undertaken directly by

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a public agency such as public works projects, as well as activities undertaken by private persons through public agency contracts or with public agency approval. (Guidelines § 15378(a).) "Approval" means "the decision by a public agency which commits the agency to a definite course of action" in regard to any "project to be carried out by any person." (Guidelines § 15352.) Finally, the CEQA analysis should be prepared "as early in the planning process as possible" in order "to enable environmental considerations to influence project, program or design." (Bozung v. LAFCO, 13 Ca1.3d 263,282 (1974).)

Here, there can be no question that approval of the privatization proposal would constitute approval of a project as defined by CEQA, and that the County is therefore required to study the environmental consequences of the decision before taking action. The approval is obviously discretionary, as there is no requirement for the County even to consider privatizing the library system, let alone to privatize it pursuant to any of the proposals received in response to the RFP. Nor is there a statutory or regulatory exemption that applies to the project.

The County may be proceeding under the assumption that a privatization contract does not result in a direct or reasonably foreseeable indirect physical change in the environment because it involves a change in operator to an existing system. This is not correct. In fact, the San Joaquin County Superior Court twice rejected this precise argument in holding that the City of Stockton's execution of a privatization contract for its water system must be analyzed under CEQA. (See Concerned Citizens Coalition of Stockton et al. v. City of Stockton et al., San Joaquin County Superior Court Case No. CV 020397, Ruling on Petition for Mandamus (October 20,2003, Judge McNatt) p. 3 ("Common sense dictates that methods of operation will differ between a government and private sector based on (at a minimum) the profit motive."); Ruling on Petition for Writ of Mandate (after remand from Court of Appeal) (November 2,2006, Judge Humphreys) p. 4 ("There is substantial evidence in the administrative record to demonstrate that transfer of the City's water utility operations for 20 years will have significant environmental impacts."), attached hereto as Exhibits 1 and 2.

Like the City's water privatization, approval of the library privatization proposal would result in both direct and reasonably foreseeable indirect physical changes to the environment. For example, the manner in which the library systems are operated and maintained directly affects important environmental variables such as building energy and water use, hardware purchases, solid waste, and pesticide usage. (See, e.g., RFP Section 1.7.3). The privatization proposal would also result in indirect changes to variables such as traffic, air quality, and growth. As the RFP makes clear, under the privatization scheme, the library employees will be those of the contractor and not the current City employees. (See, e.g., RFP Sections 1.2.1 and 1.2.2.) While the contractor may elect to hire some of the current staff, this is not guaranteed. Indeed, there will

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almost certainly be a change-over in staff given the stark reduction in benefits to City

. employees (see, infra, Part III.D). The new staff will be commuting from different locations, contributing to different traffic patterns and a potential increase in greenhouse gas emissions. The air quality and global warming impacts from such increase in

. emissions would need to be considered independently and as a cumulative impact in the region, which is already severely impacted by air quality issues.

Additionally, if the County anticipates that privatization of the library may lead to expanded services (an assumption that the Coalition and Friends question, as set forth below), it must assume that further branches will be built as a result of the expansion (as contemplated in the County General Plan), and must analyze, at least on a general level, the impacts of such physical expansion. (See San Joaquin County General Plan 2010, Volume I at IV-124, Volume III at II.E-48-52, calling for new library branches; see also City of Carmel- By- the-Sea v. Bd. of Supervisors of Monterey County (1986) 183 Cal.App.3d 229, 244.) As the court in City of Redlands v. County of San Bernardino explained, "CEQA reaches beyond mere changes in language in an agency's policy to the ultimate consequences of such changes in the physical environment." (96 Cal.App.4th 398, 409 (2002)).

Furthermore, if privatization leads to a split of the currently joined Stockton-San Joaquin library system, as referenced as a possibility in the RFP (see, e.g., RFP at p. 3), this split may result in direct or indirect changes in the environment. Such changes could include: (1) physical modifications to, or construction of, library branches to accomplish the split; andlor (2) additional vehicular trips, with attendant air quality and global warming impacts, as residents seek materials from the central branch collection in Stockton that will no longer be accessible at County branches. These environmental changes would also bring the Project within the purview ofCEQA.

Finally, pursuant to the RFP, the contractor would have the ability to review the entire library collection and identify "obsolete," "worn," or "dated" materials for removal. (See RFP Sections 1.4.1 and 1.4.2.) Because, as discussed further below, a private company has entirely different motives than the local government agency, its

view as to which materials should be removed will also be different. The composition of . the library collection has important cultural and historic significance to the community, and alteration of its contents would therefore need to be reviewed as a cultural impact under CEQA. (See CEQA Guidelines § 15064.5(b) ("A project with an effect that may cause a substantial adverse change in the significance of an historical resource is a project that may have a significant effect on the environment."); id. at Appendix G (cultural resources).)

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In short, approval of a privatization contract for the library system is a discretionary action that would result in both direct and reasonably foreseeable indirect changes to the physical environment, for which there is no statutory or regulatory exemption. Therefore, the County is legally obligated to conduct a CEQA analysis for this Project, as the City would be if it proceeds with a similar privatization contract.

B. Proceeding with a CEQA Review Process Promotes Sound Public Policy and Effective Decision-Making.

CEQA operates, first, by promoting informed decision-making and public participation. The statute outlines an initial process, called "scoping," that aids in achieving these goals. As explained by the CEQA Guidelines, "[ s ]coping has been helpful to agencies in identifying the range of actions, alternatives, mitigation measures, and significant effects to be analyzed in depth in an EIR and eliminating from detailed study issues found not to be important." (Guidelines, § 15083, subd. (a).) In addition,

"[ s ] coping has been found to be an effective way to bring together and resolve the concerns of affected federal, state, and local agencies, the proponent of the action, and other interested persons including those who might not be in accord with the action on environmental grounds." (Id. at § 15083, subd. (b).) Scoping can be achieved through a series of public workshops, roundtables, or other types of public meetings geared towards informing and receiving input from the public on the proposed privatization.

Furthermore, CEQA accomplishes its goal of informing the public and decision-makers by requiring preparation of an EIR for projects that may have a significant negative effect on the environment. The purpose of the EIR is "to inform the public and its responsible officials of the environmental consequences of their decisions before they are made." (Citizens a/Goleta Valley v. Board a/Supervisors, 52 Ca1.3d 553, 564 (1990).) The EIR is also intended "to demonstrate to an apprehensive citizenry that the agency has, in fact, analyzed and considered the ecological implications of its action." (No Oil, 13 Ca1.3d at 86.) Because it must be certified or rejected by the public agency's elected officials, it is also "a document of accountability." (Laurel Heights, 47 Ca1.3d at 392.) Thus, CEQA protects "not only the environment, but also informed selfgovernment." (Jd.)

As set forth below, the proposed library privatization presents a host of legal and public policy issues, in addition to its potential environmental impacts, that call for further study and public feedback. This analysis can readily be accomplished through the CEQA scoping/EIR process. Thus, even if the agency were not legally required to do so, the County would be well-served to engage in a public review process before deciding on a course of action regarding the privatization. Similarly, the County would benefit from immediately releasing the bid proposal(s) to the public. The County will get the

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best results through a transparent process that makes all the relevant information available to the public and the press, for knowledge and informed debate make for good policy.

In sum, the Coalition and Friends are dismayed that the County has not yet taken steps to comply with CEQA, even to prepare an initial study, and has sought no public input regarding this critical privatization Project. We urge the agency to begin this process immediately.

II. Privatization of the Library Implicates Additional Laws Regarding the Public's Right to Free Public Libraries and Access to Information.

A. Privatization of the Library System Could Jeopardize the Public's Right to Free Public Libraries.

The California State Legislature has expressly declared the fundamental importance of the continued provision of free public libraries. As stated in the Education Code:

The Legislature finds and declares that it is in the

interest of the people and of the state that there be a general diffusion of information and knowledge through the continued operation of free public libraries. Such diffusion is a matter of general concern inasmuch as it is the duty of the state to provide encouragement to the voluntary lifelong learning of the people of the state.

The Legislature further declares that the public library is a supplement to the formal system of free public education, and a source of information and inspiration to persons of all ages, cultural backgrounds, and economic statuses, and a resource for continuing education and reeducation beyond the years of formal education, and as such deserves adequate financial support from government at all levels.

(Education Code § 18010; see also id. § 18701.)

,

In order to comply with the first County Library Law requiring free public libraries, which was passed by the State Legislature in 1909, San Joaquin County chose to enter an agreement with the City of Stockton to provide for the public library services. (Board of Supervisors, Proclamation: 100 Years of the Stockton-San Joaquin County Public Library System, June 8,2010 ("County 100-year Proclamation"), attached hereto

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as Exhibit 3; Agreement between City of Stockton and San Joaquin County re Library Services (October 13, 1998) ("City-County Agreement"), attached hereto as Exhibit 4; see also Education Code § 19112; Government Code § 26150.) Remarkably, this County-City system for free public libraries has been in place for 100 years. (County 100-year Proclamation.) Indeed, the free public library system is codified in both the City and County General Plans and related enactments. (See San Joaquin County General Plan 2010, Public Facilities (3. Library Facilities and Services), Volume I at IV- 123-124, and Community Development (3. Libraries), Volume III at II.E-48-52; Stockton General Plan 2035, Public Facilities & Services (PFS) 11.1-11.4 (Libraries); City-County Agreement. )

Privatizing the public library could have legal and financial implications under the Education Code, the Tax and Revenue Code, and the State Planning and Zoning Law. For instance, the Education Code defines "public library" as "a library, or two or more libraries, operated as a single entity by one or more public jurisdictions and which serve the general public without distinction." (Education Code § 18015(a) (emphasis added); see also id. § 18710(1) ("public library" is "a library, or two or more libraries, that is operated by a single public jurisdiction and that serves its residents free of charge" (emphasis added).) Similarly, the California Tax and Revenue Code, which allows Counties to impose taxes to support public library operations, defines "public library" as "a library, or two or more libraries that are operated as a single entity by one or more public jurisdictions, that serve the general public and are required to report appropriations to the State Librarian under the provisions of Section 18023 of the Education Code." (Tax & Rev Code § 7286.59(b ).) Privatizing the Stockton-San Joaquin County library system, whereby the system would be "operated" by a private company and not a public jurisdiction, would thus call into question its status as a "public library" system under State law.

Critically, such a change in status could result in severe funding cuts to the library system, potentially leading to library closures. First, if the Stockton-San Joaquin library system no longer qualifies as a public library under State law, it would no longer be eligible for funding from the State Public library fund, other State funding for special programs, or taxation revenue allocated for libraries, which the County currently relies on for library operations. (See, e.g., Education Code 18020-18026; Tax & Rev Code § 7286.59; c.f Norman Oder, LSS1 Challenges Proposed Florida Rule on Directors; State Library Association Fights Back: Libraries Receiving State Aid Must Be Run by FullTime Employees of Library, Not Private Company, LIBRARY JOURNAL, Sept. 8, 2009 ("Oder, Sept. 8, 2009"), attached hereto as Exhibit 18 (discussing parallel Florida library law).)

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Second, private foundations may be less inclined to donate money to a privatized library system run by a for-profit company, than to a publicly operated system. Indeed, the Friends has been advised that its 501(c)3 status could be jeopardized ifit donates funds to a privately-run library system, as the Friends' mission is to support the public library system, not a library system operated by a for-profit corporation. Thus, the County stands to lose the substantial library funding that it currently receives from Friends if it proceeds with the privatization. At least one jurisdiction has rejected an LSSI proposal for library privatization based on this loss of revenue and good will from a similar Friends of the Library organization. (See Part IV, infra, discussing rejection of LSSI proposal for Dartmouth Public Libraries.)

Furthermore, a change from public operation to private operation may run afoul of the County's General Plan. For example, the County General Plan provides for "adequate public library facilities and services." (San Joaquin County General Plan, Volume I at IV-124.) To this end, the County General Plan states that "[t]he availability and accessibility of uncensored information, data, and lrnowledge found in books, magazines, and other communication media are essential to the strength of an open, free, and democratic society." (ld. at IV -123 (emphasis added).) Yet, as noted above, the proposed privatization will give the private company censorship power by way of removing "obsolete" or "dated" materials from the collection. (See RPF Sections 1.4.1 and 1.4.2.) All decisions of the County relating to public facilities must be consistent with the County General Plan. (See, e.g., Neighborhood Action Group v. County of Calaveras (1984) 156 Ca1.App.3d 1176,1182-86; Friends of "B II Street v. City of Hayward (1980) 106 Ca1.App.3d 988,998.) Because the RFP provides for changes to the public free library system that are inconsistent with the language, goals, and policies in the General Plan, adoption of a privatization contract as currently proposed would constitute a violation of the State Planning and Zoning Law. (Jd.)

B. Private Companies Are Not Accountable Under Open Government Laws.

A public library, as an arm of a government agency, is accountable to the public through open government laws, the Constitution, and the Bill of Rights. In California, the Brown Act and the Public Records Act provide especially important means by which 'citizens can monitor public institutions, and act as a check on the arbitrary use of government power. See Govt. Code §§ 6250-6275; 54950-54963.

A private management company would not be subject to these laws, but rather would be held accountable only though the contract it signs with the County. As

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former American Library Association President Patricia Glass Schuman notes, contract law provides very meager protections for the public:

"When contract law replaces public law, the accountability of libraries to their communities changes ... Accountability then relies on contract compliance monitoring instead of community input and evaluation. And, if something is not in the contract, there is a good chance that the public won't get it-no matter how great the need."

(Patricia Glass Schuman, The Selling of the Public Library, LmRARY JOURNAL, Aug. 15, 1998 at 50, 51 ("Schuman"), attached hereto as Exhibit 5.)

1. Protections Afforded by the Brown Act Would Be Lost.

The Brown Act was enacted to ensure that the actions of public agencies are "taken openly and that their deliberations [are] conducted openly." Cal. Govt. Code § 54950. A major purpose of the Brown Act is to "facilitate public participation in all phases oflocal government decision-making and to curb misuse of the democratic process by secret legislation of public bodies." (San Lorenzo Valley Community Advocates for Responsible Education v. San Lorenzo Valley Unified School District, 139 Cal. App. 4th 1356, 1409 (2006).) Under this Act and the current County-City joint library system structure, the public is entitled to participate in City Council and Board of Supervisors meetings regarding library policies and to voice their opinions regarding book selection, activity programming, and outreach efforts. Through its accountability to the elected officials, library management is also accountable to the public.

In a privatized library system, such transparency and accountability are entirely lost. A private company is under no obligation to open its meetings to the public, and the public has no right to participate in library matters, even those of unique local concern. (See Govt. Code § 54952(c)(1); International Longshoremen's and Warehousemen's Union v. Los Angeles Export Terminal, Inc., 69 Cal. App. 4th 287,300 n.5 (1999); see also City-County Agreement, Section l(d) (requiring "input from local communities on the issue oflocallevel oflibrary services.") While a concerned citizen could still voice his or her opinion to the County Board of Supervisors or the City Council, without a participatory roll in the decision-making process, such isolated expressions of concern will no doubt fall on deaf ears. Privatization thus drastically transforms and curtails the efficacy of public participation in what should be an open and democratic process.

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2. Protections Afforded by the Public Records Act Would Be Lost.

In enacting the California Public Records Act (CPRA), the Legislature declared that "access to information concerning the conduct of the people's business is a fundamental and necessary right of every person in this state." (Govt. Code § 6250.) It is implicit in the notion of the democratic process that the government should be accountable for its actions. In order to verify that accountability, the public must have access to government records to operate as a check against the arbitrary exercise of official power and secrecy in decision-making. (International Federation of Professional and Technical Engineers, Local 21, AFL-CIO v. Superior Court, 42 Cal. 4th 319,328 (2007).) In the context of a public library system, the citizens of San Joaquin County should have access to public records regarding where and how their funds are being spent. They should be able to ensure that their public library is spending tax dollars on books, programs, and library operations that are consistent with local concerns.

Like access to public agency meetings, this essential transparency would be lost if the County and/or City were to privatize its library system. The library management company would operate with public tax dollars, yet the public would not have access to detailed records regarding budget management, operating costs, or profit margins. In essence, the company is free to spend public money without being accountable to the public it is supposed to serve. (See Norman Oder, When LSSI Comes to Town, LIBRARY JOURNAL, Oct. 1,2004 at 36,39 ("Oder"), attached hereto as Exhibit 6; Matt Sylvain, Library Professional Speaks Out on Possible Library Privatization, SOUTHCOASTTODAY.com (Jan. 28, 2009) ("Sylvain"), attached hereto as Exhibit 7; Schuman.)

Indeed, the public is already encountering the lack of transparency and accountability that is the inevitable result of privatization. While the Coalition and Friends, pursuant to their rights under the Public Records Act, have asked the County for copies of the responses to the RFP, they were informed by the County Counsel's office that the proposal submitted (undoubtedly by LSSI) was to remain confidential until negotiations with the contractor had been completed. Such closed-door dealings are antithetical to the essence of a public library, which, as explained by Robert C. Ward, has "always been justified by the Jeffersonian ideal of developing an informed and enlightened electorate though the provision of information that covers all aspects of life and social issues." (Robert C. Ward, The Outsourcing of Public Library Management:

An Analysis of the Application of New Public Management Theories From the PrincipleAgent Perspective, 6 ADMINISTRATION & SOCIETY 627,628 (2007) ("Ward"), attached hereto as Exhibit 8.)

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Moreover, the most likely contractor, LSSI, has been shown to promote this type of secrecy in its previous contract dealings. When the Linden Free Public Library in New Jersey ended its contract with LSSI early, LSSI inserted a clause into the agreement stating that the city must portray the contract termination "in the most positive manner possible." (Norman Oder, LSS1 in NJ: One Contract Ends, Efforts Continue, LIBRARY JOURNAL, April 15, 2004 ("Oder, April, 15,2004") at 16, attached hereto as Exhibit 9.)

In other words, the city's press release could not inform the public that the city would save $300,000 by ending the contract or that LSSI had been delinquent in paying some of the library'S bills. (1d.)

The Coalition and Friends strongly oppose allowing such secrecy to prevail in the management of public libraries in San Joaquin County. As the California Legislature has stated, "The people ... do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created." (Govt. Code § 54950.) As a public institution, the Stockton-San Joaquin County free library system should remain transparent, open and accountable to the public.

III. Privatization of the Library Is Bad Public Policy Given Its Numerous Economic, Social, and Cultural Impacts.

For 100 years, the Stockton-San Joaquin County Public Library System has "continuously provided information for students, business people, the intellectually curious and those interested in lifelong learning, as well as material for the reading pleasure of thousands oflocal residents .... " (County 100-Year Proclamation.) There are numerous reasons why privatization of such a fundamentally public service would be an unwise policy choice for the County. Below, we detail but a few of these reasons.

A. A Private Company Is Committed to Making a Profit, Not Providing A Public Service.

Private companies must be committed to turning a profit in order to exist.

Thus, purely for budgetary reasons, library services, programs, and materials that are currently a high priority for the local community may be de-prioritized by the company. As professional librarian and past president of the ALA, Michael Gorman, explains:

Privatization of library services makes no sense from the economic or professional points of view. I believe the reasons for that lack of coherence lie in the clash of outlook and purpose between those who render public service with a commitment to the common good and

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those who offer to provide such services in order to make a profit for shareholders. These two groups have incompatible motivations and diametrically opposed bottom lines-for the first, the bottom line is the betterment of communities, the advancement of literacy and learning, and using expertise to improve people's lives; for the second, the bottom line is profit and loss.

(Letter from Michael Gorman to San Joaquin Board of Supervisors (July 7,2010) ("Gorman"), submitted concurrently herewith, at p. 4.)

Particularly troubling to the Coalition and Friends are the incentives open to the private company if the company finds a way to "maximize results," or save revenues at the expense of popular library programs. (See RFP at 7.) For example, the private company has an incentive to begin charging fees for programs that are currently free, such as the Mobile Library, Families Reading Together, and Adult Literacy Services. The RFP should not provide any inducement for a private corporation to charge the most vulnerable members of society for essential programs. Such an approach, which a profit-incentive encourages, would directly undermine the library's egalitarian role as a free resource for the elderly and the underprivileged.

An equally disturbing consequence of library privatization concerns the staffing of libraries under the private company's regime. Because libraries, like many public services, incur the heaviest costs in staff, a common downside to privatizing a library system is the company's propensity to reduce the number oflibrarians it keeps on staff andlor to cut librarian salaries and benefits. (Anna Madrzyk, Oak Brook Could Privatize Library as a 'Last Resort,' DAILY HERALD, JuI. 5,2009, attached hereto as Exhibit 10; Schuman at 52; Oder at 37.) Yet, with the removal of these librarians, the community is left with a resource without the trained professionals to guide its effective use. As Michael Gorman writes:

A library is much more than a building with collections of books and other materials and computer terminals. It only becomes a library service when qualified librarians are available to assist in the use of those collections for research, study, and leisure purposes (including helping and advising in the use of digital resources) and to apply their expertise in the selection of library materials. The 'logic of the situation dictates that privatizing libraries will decrease the amount of professional service to the community.

(Gorman at p. 4.)

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In sum, there are fundamental differences between a company motivated by generating profits and a governmental agency whose mission is to protect and promote the public interest. As many experts have recognized, it makes little sense to privatize the free public library system, which is a fundamentally unprofitable public service.

B. Library Services Are A Valued Community Resource, Not a Commodity.

Library services are inextricably rooted in local communities, and serve an educational, not commercial or entertainment purpose. As noted by librarian John Buschman, "instant information is not the same as research or actually learning something." (John Buschman, Staying Public: The Real Crisis in Librarianship, AMERICAN LIBRARIES, Aug. 2004 ("Buschman"), attached hereto as Exhibit 11.) When library services are tied to economics, efficiency, and the "customer," the library becomes indistinguishable from the bookstore. "Responding purely to popular demand forces [ the library] to abandon any notion of outreach to underserved populations or providing alternative resources on our shelves and in our services-e- a basic, democratic tenet of fairness." (ld.)

Furthermore, an out-of-town corporation has no incentive to develop longterm community ties, which are essential to successful public libraries. Once the contract term is completed, the private company can simply pick up and leave. Because libraries are collections of local knowledge, the needs of the County are best served not by the "information specialists" of a faceless corporation, but by librarians who understand local values and are committed to 'fostering a learning environment for the community. As Patricia Glass Schuman notes:

Libraries exist because our society values the free flow of ideas and opinion. They are not about profit. They promote access, equity, and diversity. America's public libraries are the building blocks of democracy, valued for their comprehensiveness, currency, openness, and multiplicity of viewpoints. Their expert staff is trained not only in the mechanics of handling "things" like books but more importantly has been inculcated with the.philosophy that all knowledge is valuable ifit is of value to the seeker and that all opinions deserve to be heard.

(Schuman at pp. 1-2.)

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~ WEI N BE R G E R LLP

San Joaquin County Board of Supervisors July 7, 2010

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c. Privatization Is Not Likely To Make The Library More Economically Efficient.

The primary justification for privatizing a formerly public service is that a private company can provide the service more cheaply than the government can. A recent study by Robert Ward, however, casts doubt on that conclusion. The Ward study surveyed the effects of privatization, including economic efficiency gains, in seven outsourced library systems. (Ward at 629.) It found that five of the seven cases showed a failure to gain economic efficiency, and that six of the seven cases found either that citizen use of the library declined after privatization or that an increased budget was the primary driver behind citizen use gain. (Id. at 645.) All seven cases also showed that claims of economic efficiency gains were strongly related to increased funding rather than to privatization itself. (Id.) The Ward study thus casts serious doubt on the principal rationalization for exposing our public agencies to the threat of outsourcing.

The economics of privatizing the Stockton-San Joaquin public library system similarly do not add up. The sample contract in the RPF would have the County pay the contractor one-twelfth (or approximately 8.3%) of the library budget to conduct operations. (See RFP at p. 38). As explained by library expert Michael Gorman, "payment of 8.3% of the library budget to a private company for public services under current reduced budgets makes no sense economically for the community or for the company." (Gorman, p. 3.) Furthermore, as discussed above, privatization would result in the loss of funding from Friends and potentially other non-profit groups and foundations, the State, and taxpayers. Taken together, these factors weigh heavily against the so-called "economic rationale" for privatizing the library.

The Coalition and Friends therefore urge the County to carefully consider the costs of privatization. Board members should ask whether it is worth the risk that the County may give up the transparency, accountability, and commitment to community service currently guaranteed by our public libraries, but receive nothing in return.

D. Privatization Would Result in Serious Impacts to Public Employees.

As set forth in the RFP, the privatization would result in all personnel being employed by the .contractor. (See, e.g., RFP Sections 1.2.1 and 1.2.2.) Consequently, there would no longer be any public employees at the library. Although the contractor may choose to hire some of the current employees and retain them as library staff, given a private company's profit motive and the cost savings that would result from staffing cuts (discussed, supra), layoffs associated with the transition are inevitable. (See Part IV, infra, discussing layoffs in prior privatizations.) The library system thus stands t8 lose

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San Joaquin County Board of Supervisors July 7,2010

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the wealth of local library knowledge provided by librarians who have worked in the County for years.

Moreover, even for the employees that are able to keep their jobs, there will be important consequences as a result of the privatization. Because the library staff will no longer be City employees, they cannot maintain their current union affiliation (and attendant bargaining power) and will lose all Civil Service benefits they previously received. According to a report in the Library Journal, the difference can be staggering. For example, in the County of Riverside library system (which was privatized in 1997 via a contract with LSSI), LSSI provides a retirement benefit in which an employee can contribute to his or her own 40 1 (k)-a plan subject to market variances-and LSSI provides an undisclosed matching contribution. (Oder at 38.) In contrast, a 20-year employee of the County of Riverside is eligible for early retirement (at age 55) and receives 40% of his or her annual salary though participation in the California Public Employees' Retirement System. (ld.)

Such a dramatic loss of job benefits and retirement security can and will result in high staff turnover and more reliance on paraprofessionals or librarians with less education. (Schuman at 52; Oder at 38; Akito Yoshikane, Public Librariesfor Profit, IN THESE TIMES, Nov. 27, 2007 ("Yoshikane"), attached hereto as Exhibit 12; see also Part IV, infra.) This result, in tum, will ultimately have a detrimental effect on the indispensible service provided by public librarians. (Yoshikane; Oder; Schuman).

IV. History Demonstrates that Privatized Public Services Can Produce Negative Results for the Community.

As the City is well aware through its recent experience privatizing its water system, privatization can often result in unintended negative consequences for the community. For example, privatization can result in (1) contract disputes or other legal problems, causing taxpayers millions of dollars, or (2) decreases in public services due to the company's cost-cutting measures or under-performance. Prior library privatization deals, in California and other states, demonstrate that library systems are not immune from these pitfalls.

Several LSSI contracts have resulted in either early terminations or legal problems. As noted above, the Linden Free Public Library in New Jersey terminated its contract with LSSI ten months early, likely due to a desire to save $300,000 in costs and to the fact that LSSI had been delinquent in paying library bills. (See Oder, April 15, 2004.) Similarly, eight months into a two-year contract with LSSI, the Fargo, North Dakota, Public Library Board voted to terminate its contract due to the "trustees'

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San Joaquin County Board of Supervisors July 7,2010

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dissatisfaction with LSSI's failure to pay bills on time," causing magazine and newspaper subscriptions to lapse. (See Fargo Public Library Drops LSS1 Contract, at http://www.ala.org/alalalonline/currentnews/newsarchive/2003/september2003/fargopubl iclibrary.cfm (Sept. 1,2003), attached hereto as Exhibit 14.)

There have been at least two reported legal actions surrounding LSSI contracts due to employee relations. After privatization of the Jackson County, Oregon library system, the union that previously represented most of the library workers (Service Employees International Union Local 503) "filed an unfair labor practice complaint against LSSI with the National Labor Relations Board (NLRB)." (See Norman Oder, Library Union in Jackson County, OR, Gains LSS1's Agreement to Negotiate Contract, LIBRARY JOURNAL, Feb. 16,2008, attached hereto as Exhibit 15.). Additionally, a privatization contract between LSSI and the Jersey City Free Public Library System was overturned by the New Jersey State Superior Court after it was challenged by the library's non-professional staff union based on an improper public process. (Susan DiMattia and Michael Rogers, NJ Judges Nixes LSSL Jersey City Outsourcing Contract, LIBRARY JOURNAL, Nov. 15, 1998, attached hereto as Exhibit 13.) Although Jersey City was able to circumvent the ruling by retaining LSSI on a consulting basis, the City later decided not to renew its contract, citing as one reason the company's failure to adhere to contract terms requiring it to computerize the entire library system. (See, e.g., Prescott Tolk, Bookends City Moves Towards Terminating Library Consulting Firm, HUDSON REpORTER, Nov. 9,2001, attached hereto as Exhibit 16.)

As discussed above, cost-cutting by library privatizations can result in decreased library staffing and reduced services. Indeed, several LSSI contract deals have already resulted in less trained library staff, high staff turnover, and decreased library hours. As one article explains, "Lancaster, Texas has seen 'significant turnover' in personnel since LSSI took over operation. Seven of nine employees listed on the library Web site left, and the number of librarians required to have masters degrees in library sciences was reduced from three to two. In Finney County, Kansas, spending on staff was reduced from 59.5 percent of the library's budget in 2002 to 51.9 percent in 2003, with the materials budget being cut by one percent." (Robert Plain, Who is LSS1?, ASHLAND DAILY TIDINGS, Sept. 8, 2007 ("Plain"), attached hereto as Exhibit 17. ) Furthermore, LSSI's proposal to contract for the Jackson County, Oregon Library System resulted in an up .to fifty percent reduction in library hours in library branches.

(Y oshikane.) There are, no doubt, other examples of reductions in services from privatized city and county library systems. At the federal level, Patricia Glass Schuman and the ALA have documented how the Reagan-era privatization of federal libraries resulted in "Less Access to Less Information by and About the U.S. Government," including high staff turnover and frequent closures of federal libraries .: (Schuman.)

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San Joaquin County Board of Supervisors July 7, 2010

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Finally, several public entities have reviewed, but rejected, privatization of the libraries in their communities given the negative impacts discussed above. For example, in 2003, the staff at the Passaic Public Library joined forces with a union to oppose an LSSI privatization proposal, which was dropped. (Oder at 38.) In 2007, Bedford, Texas rejected an LSSI proposal, even though the company promised to save the company $100,000 in operational costs. (Plain). More recently, in the Spring of 2009, after receiving a petition signed by nearly 700 concerned citizens, the Board of County Commissioners in Hernando, Florida declined to decide on a privatization proposal with LSSI. (See Oder, Sept. 8,2009.)

When faced with budget crises, some communities have even chosen to reduce staff hours until economic times improve, rather than to contract with LSSI. For instance, earlier this year, Nevada County rejected an LSSI proposal after intense community opposition, including from Truckee Friends of the Library, and instead opted for a plan with fewer staff hours until further funds could be raised for the library. (Nevada City's Doris Foley Historical Library to Be Open Two Days a Week, NEVADA CITY ADVOCATE, May 14,2010, attached hereto as Exhibit 20.) Similarly, in 2009, the Library Board for the Dartmouth Public Libraries, Massachusetts rejected an LSSI proposal and instead opted to temporarily eliminate a staffing position. The Board reasoned that (1) a private monopoly would be unable to run the library more effectively than the government, and (2) the privatization would result in a loss of funding, volunteer efforts, and the good will from the Friends of the Dartmouth Library, who would not support a for-profit company running the library. (Norman Oder, MA Library, After Rejecting LSSL Lays Off Director to Save Money, LIBRARY JOURNAL, Mar. 5,2009, attached hereto as Exhibit 19.).

In sum, many communities have already rejected library privatization-some the hard way, by having to cancel privatization contracts=after discovering that handing over a highly valued community asset to a private company does not always produce the best results and can, in fact, result in serious negative impacts. San Joaquin County should take heed of these past experiences and, at a minimum, engage in a thorough public process to fully investigate the impacts of library privatization in this community.

v. Conclusion

In sum, the Coalition and Friends believe that a private company is not well suited to run their public libraries. The for-profit nature of a private corporation involves perverse incentives that are antithetical to the values of the County's free public library system. As library experts attest, privatization typically results in the reduction of trained library personnel and the loss of public accountability. The private company has no

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~ WEI N B ERG E R LLP

San Joaquin County Board of Supervisors July 7,2010

Page 19

incentive to retain existing personnel, to maintain free services such as the Bookmobile, or to develop lasting ties to the community. At the same time, the cost-savings promised by private companies rarely materialize, as services decline and the library loses access to many critical sources of funding. For all these reasons, and because of the spotty record of LSSI in particular, we urge the County to cancel the RFP.

If the County should decide to proceed with the Project, we note that the County is legally obligated to complete a CEQA review process before approving any privatization contract. The County should also consider the other legal issues raised by this letter, including the Project's consistency with the Education Code and the local General Plan.

Very truly yours,

SHUTE, MIHAL Y & WEINBERGER LLP

cc: Jon Drake, San Joaquin County Purchasing and Support Services City of Stockton City Council

San Joaquin County Counsel's Office (letter only)

Friends of the Library (Escalon, Linden, Manteca, Ripon, and Tracy) (letter only)

EXHIBIT LIST

• Exhibit 1: Concerned Citizens Coalition of Stockton et al. v. City of Stockton et al., San Joaquin County Superior Court Case No. CV 020397, Ruling on Petition for Mandamus (October 20, 2003, Judge McNatt)

• Exhibit 2: Concerned Citizens Coalition of Stockton et al. v. City of Stockton et al., San Joaquin County Superior Court Case No. CV 020397, Ruling on Petition for Writ of Mandate (after remand from Court of Appeal) (November 2,2006, Judge Humphreys)

• Exhibit 3: Board of Supervisors, Proclamation: 100 Years of the Stockton-San Joaquin County Public Library System, June 8, 2010

• Exhibit 4: Agreement between City of Stockton and San Joaquin County re Library Services (October 13, 1998)

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~ WEI N B ERG E R LLP

San Joaquin County Board of Supervisors July 7, 2010

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• Exhibit 5: Patricia Glass Schuman, The Selling of the Public Library, LIBRARY JOURNAL, Aug. 15, 1998

• Exhibit 6: Norman Oder, When LSS! Comes to Town, LIBRARY JOURNAL, Oct. 1, 2004

• Exhibit 7: Matt Sylvain, Library Professional Speaks Out on Possible Library Privatization, SOUTHCOASTTODAY.com (Jan. 28, 2009)

• Exhibit 8: Robert C e . Ward, The Outsourcing of Public Library Management: An Analysis of the Application of New Public Management Theories From the Principle-Agent Perspective, 6 ADMINISTRATION & SOCIETY 627 (2007)

• Exhibit 9: Norman Oder, LSS! in NJ: One Contract Ends, Efforts Continue, LIBRARY JOURNAL, Apr. 15 2004

• Exhibit 10: Anna Madrzyk, Oak Brook Could Privatize Library as a 'Last Resort,' DAILY HERALD, Jui. 5,2009

• Exhibit 11: John Buschman, Staying Public: The Real Crisis in Librarianship, AMERICAN LIBRARIES, Aug. 2004

• Exhibit 12: Akito Y o shikane , Public Libraries for Profit, IN THESE TIMES, Nov. 27,2007

• Exhibit 13: Susan DiMattia and Michael Rogers, NJ Judges Nixes LSS1, Jersey City Outsourcing Contract, LIBRARY JOURNAL, Nov. 15, 1998

• Exhibit 14: Fargo Public Library Drops LSS! Contract, at http://www.ala.org/alalalonline/currentnews/newsarchive/2003Iseptember2003/far gopublic1ibrary.cfm (Sept. 1,2003)

• Exhibit 15: Norman Oder, Library Union in Jackson County, OR, Gains LSS1's Agreement to Negotiate Contract, LIBRARY JOURNAL, Feb. 16,2008

• Exhibit 16: Prescott Tolk, Bookends City Moves Towards Terminating Library Consulting Firm, HUDSON REpORTER, Nov. 9,2001

• Exhibit 17: Robert Plain, Who is LSS!?, ASHLAND DAILY TIDINGS, Sept. 8,2007

• Exhibit 18: Norman Oder, LSS! Challenges Proposed Florida Rule on Directors,' State Library Association Fights Back: Libraries Receiving State Aid Must Be Run by Full-Time Employees of Library, Not Private Company, LIBRARY JOURNAL, Sept. 8, 2009

• Exhibit 19: Norman Oder, MA Library, After Rejecting LSS1, Lays Off Director to Save Money, LIBRARY JOURNAL, Mar. 5, 2009

• Exhibit 20: Nevada City's Doris Foley Historical Library to Be Open Two Days a Week, NEVADA CITY ADVOCATE, May 14, 2010

P:\Stock\Lib\kel004 (draft 5 comment letter).doc

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~ WEI N BE R G E R LLP

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