Sharing The Costs Of Electronic Resources 
Among The UC Campuses

Goals of cost sharing models

The Collection Development Committee (CDC) and the Joint Steering Committee for Shared Collections (JSCSC or JSC) periodically review "business models" for campus sharing of the costs of electronic resources licensed system-wide.  The primary goals are: 

•	To allow as many UC users as possible to benefit from centrally licensed electronic information;
•	To divide costs fairly and reasonably according to criteria on which all participants can agree;
•	To take into account the diverse size of the campuses, their libraries, academic programs, budgets, and potential use of electronic resources.

Among the variables considered are:

1.	Current costs for equivalent content or potential cancellation savings;
2.	Relative campus size as measured, e.g., by collection budgets or FTE;
3.	Potential or actual use of the resource, based on estimates or experience;
4.	Availability of system-wide funds, e.g., at the CDL level;
5.	Hybrids combining any of the above.

1    Principles for Cost Sharing

1 A.   Cost Sharing Model Endorsed by the CDC

Having considered a variety of system-wide cost sharing models, the JSCSC recommended the following principles that were endorsed by the CDC.

1.  If the cost for any campus is less than $1,000 or if the total system-wide cost is less than $10,000, the actual cost will be paid by each campus. (examples: CIAO and ITER)

[Some bibliographer groups have reasonably lowered this threshold in order to increase campus participation.]

Otherwise:

2.  The costs of licenses for digital resources will be shared among the participating campuses in proportion to the size of their collection budgets.  
[Source: http://www.slp.ucop.edu/stats/ ,  the current year’s library statistics, and “Table for Library Expenditures: Adjusted Budget”]

3.  No campus shall pay more than the amount it would pay via independent negotiation with a provider.

4.  In cases where the system-wide discount is not high enough to satisfy Principle 3, CDL may contribute the difference, depending on funds available and the strategic importance of the resource.  (examples: Web of Science, LION, etc.)

5.  For resources already widely held, a "base" cost, roughly equivalent to the minimal campus cost for the content in print or CD-ROM, will be subtracted from the total amount to be shared, before the proportional campus shares are calculated.  (examples: Historical Abtracts, America: History and Life)

6.  A campus which does not contribute its share to the system-wide license of a given resource will not have access to that resource, unless the potential demand from that campus is likely to be minimal for programmatic reasons (example:  UCSF in many cases).

1 B.   CDL's Contribution

With advice from JSCSC, the CDL uses its funds to facilitate the transition from print to digital collections.  The CDL also uses funds strategically to enable purchase of system-wide resources by contributing enough to enable large campuses to participate with advantage and to assure small campus participation. The JSCSC will identify priorities annually. However, these may not all result in licensing if contract and business terms are intractable.  Faculty expect University-wide access to most resources.  Co-investment to assure this is a collaborative challenge.

2     How Do We Arrive at the Campus Shares?

2 A.   Shares Based On Size Of Campus Collection Budgets

The formula is based on an average of the past three years’ campus collection budgets.  JSC recommended that the shares formulas be adjusted annually, as soon as new data are available, based on a rolling average of the most recent three years.  The calculated average modulates the extreme values, while not substantially changing most of the shares.

The new share model will be applied, as appropriate, to co-funded resources, licensed each year or substantially re-negotiated.  Old licenses and routine renewals will not be revised according to the new shares formula, but will continue with the shares formula originally applied. 

Recommended campus cost shares for 2003, along with campus cost shares for 2002 and 1999-2001, are:

UC Campus	2003 Shares	2002 Shares	1999-2001 Shares
UCB		22.2%		22.0%		19.1%
UCD		12.9%		13.0%		13.9%
UCI		10.6%		10.4%		10.9%
UCLA		17.6%		17.3%		18.4%
UCR		7.2%		7.4%		7.6%
UCSD		11.5%		11.8%		12.0%
UCSF		2.4%		2.6%		2.7%
UCSB		9.3%		9.3%		9.1%
UCSC		6.3%		6.3%		6.3%
Total		100.0%		100.0%		100.0%

Source: http://www.slp.ucop.edu/stats/
then the library statistics, and Table for Library Expenditures: Adjusted Budget

2 B.   How Non-Participation Of Campuses Influences Shares

UC Campus	2003  % Shares	w/o SF	w/o SF, R	w/o 3 smallest	
					
B	22.2	22.75	24.55	26.4	
D	12.9	13.22	14.27	15.34.	
I	10.6	10.86	11.73	12.6	
LA	17.6	18.03	19.47	20.93	
R	7.2	7.38	0.0	0.0	
SD	11.5	11.78	12.72	13.67	
SF	2.4	0.0	0.0	0.0	
SB	9.3	9.53	10.29	11.06	
SC	6.3	6.45	  6.97	  0.0	
					
Total	100.0	100.0	100.0	100.0	
Loss		2.4	9.78	15.9	

Note: the combined loss of the 3 smallest campuses has less impact than the individual loss of any of the 3 largest campuses.

2 C.   How Discounts Influence Shares

Discounts off the system-wide cost help us approach our objective in principle 3, that no campus will pay more than the amount it would pay via independent negotiation with a provider.  However, the UC-wide discount has to exceed 40% before the pro-rated share of the largest campus falls below "par".

Assume a resource is offered separately to the campuses for $2,000 each ("par").
"need" is the excess when the formulaic share exceeds "par." (*)
"need%" is this excess cost as a percent of the UC-wide costs.

Campus	"par"	% share	no disc		"need"	-20%		-30%		-40%		
B	$2,000 	22.2%	$3,996 	*	$1,996 	$3,197 	*	$2,797 	*	$2,398 	*	
D	$2,000 	12.9%	$2,322 	*	$322 	$1,858 		$1,625 		$1,393 		
I	$2,000 	10.6%	$1,908 			$1,526 		$1,336 		$1,145 		
LA	$2,000 	17.6%	$3,168 	*	$1,168 	$2,534 	*	$2,218 	*	$1,901 		
R	$2,000 	7.2%	$1,296 			$1,037 		$907 		$778 		
SF	$2,000 	11.5%	$2,070 		$70 	$1,656 		$1,449 		$1,242 		
SB	$2,000 	2.4%	$432 			$346 		$302 		$259 		
SD	$2,000 	9.3%	$1,674 	*	$160 	$1,339 		$1,172 		$1,004 		
SC	$2,000 	6.3%	$1,134 		     	$907 		$794 		$680 		
												
Total	$18,000 	100	$18,000 		$3,716 	$14,400		$12,600		$10,800 		
												
need					$3,716	$1,731 		$1,015 		$398 		
												
need%					21%	12.02%		8.06%		3.69%		

2 D.   How "Base" Fees Influence Shares

A "base" fee charged to all campuses before the shares are calculated, where half the cost of the license could be saved by canceling print equivalents, for example, greatly reduces the "need" for CDL subsidy.  After the base amount is subtracted from the total cost, shares are calculated using the standard shares of the amount remaining plus the base amount to arrive at “Net”.

				No discount		-20%		
										
Campus	“par”	“base”	% share	Share	Net		Share	Net		
										
B	$2,000	$1,000 	22.2%	$1,998 	$2,998 	*	$1,199 	$2,199 	*	
D	$2,000 	$1,000 	12.9%	$1,161 	$2,161 	*	$697 	$1,697 		
I	$2,000 	$1,000 	10.6%	$954 	$1,954 	*	$572 	$1,572 		
LA	$2,000 	$1,000 	17.6%	$1,584 	$2,584 	*	$950 	$1,950 		
R	$2,000 	$1,000 	7.2%	$648 	$1,648 		$389 	$1,389 		
SF	$2,000 	$1,000 	11.5%	$1,035 	$2,035 		$621 	$1,621 		
SB	$2,000 	$1,000 	2.4%	$216 	$1,216 		$130 	$1,130 		
SD	$2,000 	$1,000 	9.3%	$837 	$1,837 	*	$502 	$1,502 		
SC	$2,000 	$1,000 	6.3%	$567 	$1,567 		$340 	$1,340 		
Total	$18,000 	$9,000 	100.0%	$9,000 	$18,000 		$5,400 	$14,400 		
										
need					$1,778 			$199 		
need%					9.88%			1.38%		

3    Advantages and Disadvantages of Several Cost Sharing Models

3 A.   Current Costs and Potential Savings

Existing campus expenditures on the same content in other formats (print, CD-ROM, existing electronic licenses with limited simultaneous-users, etc.) can be considered in calculating shares.

a.	Campus costs of content in other formats 
b.	Potential savings realized if these formats are discontinued

    Advantages:
•	Reflects existing commitments in terms of current costs
•	Implies ability and willingness to pay
•	May reflect program diversity

    Disadvantages:
•	Other formats may not be easily cancelled
•	Reflects traditional models (objects vs. use)

•	Favors large campuses rather than whole system
•	Prior lack of licenses may be due to budget deficiency

    Examples:  Project Muse, most other electronic journal proposals

3 B.   Relative Campus Size

Campus size is a measure for sharing often used by vendors. Relative campus size can be measured by:

a. Campus collections budget as share of UC-wide collections budget
b. Size of campus community: faculty, staff, student FTE

    Advantages:
•	Increases ability of smaller campuses to participate
•	Increases UC-wide access to new resources, fosters unity
•	Internal institutional price more flexible than publishers'
•	Can be simple, consistent

    Disadvantages:
•	Does not reward prior commitments
•	May not reflect programmatic diversity
•	May not be affordable by larger campuses
•	Larger campuses may feel that they are subsidizing smaller ones

    Examples:  BIOSIS (contribution currently not needed), BIP, EEBO, Gale, JSTOR

3 C.   Potential or Actual Use

Use or lack of use can be a basis for calculating shares by examining:
 
a.	Estimates based on use of test files, related electronic resources
b.	Demonstrated use, e.g., from the previous year of the same resource

    Advantages:
•	Is the most precise reflection of local demand
•	Is the best reflection of local programs, demographics
•	May reflect mix of undergraduates, graduates, faculty sophistication
•	Cost per use is equalized

    Disadvantages:
•	May punish promotion
•	"Use" is difficult to define; a definition is needed
•	Complicates long term planning with year-to-year changes
•	May require a variability "governor" to reduce uncertainty

    Examples:   None yet, except traditional "metered" pricing, though CAS Scifinder Scholar may eventually reflect this model.

4     Hybrid Models

4 A.   Mix of 1 and 2
   
 If the new resource costs less, savings are shared proportionately
    If the new resource costs more, increase is shared proportionately

    Advantages:
•	Compromise between large and small campuses
•	Compromise between prior commitment and potential demand

    Disadvantages:
•	Large campuses may feel that they are subsidizing smaller ones

    Examples: COMPENDEX, Silver Platter

4 B.   Mix of 1,  2 and 3:  ramp up use, then normalize costs
     
     Year 1 based on 4 A.
     Year 2+, based on use ratios of previous year(s)

    Advantages and example  same as 3 B.
•	Allows interim participation leading to full partnership

Disadvantages same as 3 B.

5     UC-Wide Unified Budgetary Increases (i.e., at the CDL Level)

Unified funds obviate the need for complex inter-campus negotiation.

    Advantages
•	Require no local sacrifice of current programs and resources
•	Campus participation is not constrained by local resource inadequacy
•	Even if one-time, may test local demand, define future shares

    Disadvantages
•	If one-time only, provide only a bridge to greater difficulty

    Examples:  All older CDL databases, WOS, LION, etc.

Alan Ritch, UCSC  12/96, 3/97, 9/99
Revised Mary Engle 6/03