WALS fees -- How the WALS Fee is Calculated (with examples from the proposed 2022 budget)
WALS fees are based on the library's file size (patrons and items) and on the circulation for the prior year. There is also a base fee amount. The proposed base fee for 2022 was $8,300.
The current formula for calculating fees has been used since 2009 (and tweaked in 2019) but basing library fees on file size, circulation, and a base fee goes back at least to the late 1990s and has been accepted as a fair way of allocating the cost of this service to each library. Many other library systems also base fee calculations on these factors.
We begin the budget process by calculating the next year’s expenditures. Revenues from all other sources are subtracted from the expenditures. The amount remaining gets shared among the libraries according to the formula. In 2022, WALS expenditures were about $791,000. Of this, about $88,000 (about 11%) came from Winnefox, $2,000 from interest, leaving about $701,000 to be divided among the 29 libraries.
The Formula is calculated based on a library’s “file size” and circulation. “File size” is calculated by taking a snapshot of the total number of all items and all user records (including logins and library use records) in the database at the beginning of budget season (usually the first week or two of June). Circulation is the total number of items checked out (including Withdrawn, InProcess, Damaged, bookclubs, staff, etc) in the last 365 days from the date of the File Size snapshot. We use all records and all checkouts to better reflect a library's use of the ILS system-ass opposed to patron's use of the system as reflected in the Annual Reports.
Once we have taken the snapshots, we calculate each library’s percent of the total file size, and each library's percent of the total circulation. Those two percentages are then averaged together to create a "Library Average Percent." That average percentage is used to calculate the library’s initial cost.
Think of the $701,000 as a pie that needs to be completely divvied up: If Neenah is really active and has a high %, then not only is their slice of pie bigger, but the remaining libraries' slices must get smaller. On the other hand, Oshkosh was closed for most of 2020, so their slice of the pie shrank that year--leaving more for everyone else to pick up.
Closures due to the pandemic exposed how drastically circulation--and thus any 1 library's share of the pie--can fluctuate. Therefore we are using an average of the past 3 years worth of File Size and Circulation snapshots to create the "Library Average Percent." This has the effect of somewhat mitigating the dramatic fluctuations in circulation many libraries experience from year to year.
The initial cost per library places some libraries below the base fee. We have a base fee because there are other benefits each library receives and related expenses that each library incurs (telecom, internet, website hosting, etc) which are not directly tied to the database size or circulation. Thus the base cost represents a minimum “cost of doing business” regardless of size. So, we bring all the libraries below the base cost up to this amount ($8,400).
There are 13 libraries that paid the base fee in 2022. (13 x $8300 = $107,900).
This means that the remaining 16 libraries need to pay about $593,100 ($701,000 - $107,900 = $593,100).
So, to use Neenah as an example:
1. Neenah has a file size of 254,946 records. This is the total of their item records in the database and all user records with a library of NEENAH. This is about 21.2% of the total file size of 1,199,816 records (of above base libraries).
2. Neenah's 3-yr circulation average is 684,532. This is about 31.8% of the 2,147,978 items checked out by the 16 above base libraries.
3. Those two percentages are averaged to get 26.6%.
4. Neenah's fee therefore is about $157,760, which is about 26.6% of $593,100.
Note that because I used rounded numbers for the expenditures and revenues, these calculations will be slightly different than the actual WALS fees.
When the sum of all the libraries (above and below base) is totaled, it equals the required $701,000.