Four years ago, in the dire time of revenue shortfalls for North Carolina’s budget, the state’s Agency for Public Telecommunications was barely alive. Positions funded in the budget were whittled from 18 to 12, and by October 2002 only six of the jobs remained filled. Executive Director Leila Tvedt was one of the casualties.
Gov. Mike Easley recommended that the agency be eliminated.
But today, APT appears to be thriving. The staff is back up to 11 employees (according to its Web site). Funded by receipts from other state agencies that enlist their help, as well as a budget stipend from the state, APT’s budget has grown from a low of $1.13 million in fiscal 2003-04, to more than $4.5 million this year. This is despite the fact that APT’s state appropriation has been nearly halved since 2001, from $1.07 million to its current $575,216.
Last year APT surpassed its legislated budget target of $3.5 million by taking in $4.9 million in receipts, for work for outside public agencies. In the most recent fiscal year (which concluded June 30) the budgeted target for receipts was nearly $4.6 million. Actual revenues were $5.4 million.
How did the turnaround happen so rapidly? What converted this throwaway on the discard pile into a treasured gem among state agencies in the eyes of legislators?
“We’ve had a focus on a new line of business,” said Fred Hartman, executive director of APT. “We decided to get into the business of media buying.” That, and the recognition that APT offers competitive-quality work at a significant cost savings for fellow government entities.
APT provides media production services mostly for state, but also local and federal, government agencies. It produces a weekly cable access public affairs program, “OPEN/net,” and also makes radio and television public service announcements for other agencies. APT also can handle teleconferences for government, and produces educational and informational videos like those for state and local museums.
But Hartman said in mid-2003 APT expanded its services to include media buying — that is, purchasing airtime on broadcast outlets for the PSAs it produced. He said most similar private agencies include ad placement as part of their bundled services, so it made sense for APT to do so also. The agency keeps 5 percent of all media buys on behalf of its government clients to cover its own expenses related to producing and placing the ads.
“We felt like media buying was a natural fit,” Hartman said. “The bulk of what you see [in revenues] is pass-through funds.”
Today’s relatively good times stand in contrast to four years ago. In early 2002 lawmakers and Easley asked state departments for recommendations on budget cuts. Within the Department of Administration, where APT is housed, then-Secretary Gwinn Swinson considered the media agency as one of her proposed cuts for state appropriations, and sought to determine whether it could continue on receipts revenue alone.
According to board meeting minutes, Swinson said that despite APT’s efficiency and cost savings, it did not provide a core function of government. Both the governor and the Senate recommended elimination of APT’s appropriation in the mid-2002 budget adjustments. In July that year, then-Executive Director Tvedt and other staffers lost their jobs.
But having survived in the final budget, the APT board was searching for a new executive director by January 2003. Hartman, a former press secretary for Easley, was chosen.
Later in the year he and his staff developed a plan to bundle the marketing of all APT’s services, which had previously been advertised separately. As a result, many of its clients had gone elsewhere for certain services, which Hartman said could have been provided by APT at a more competitive rate. For example, APT reported that in its first year of media buying (2003-04), the agency handled $3.3 million in advertising placements, and said it saved other state agencies $300,000 compared to what private vendors would have charged. A study by the Office of State Budget and Management in 2004 determined that APT should be included in the bid process for all state agencies that seek media services.
State agencies are not obligated to use APT for their media production or placement needs.
APT takes great pride in its work, noting various industry awards for its production work on its Web site. Its reputation, combined with its cost savings, have enabled Hartman to secure several multimillion-dollar contracts, including one with the Division of Air Quality for $1.9 million over three years. APT also had the State Fair advertising contract last year, and has it again this year. Its stronger financial position has enabled APT to look toward upgrading its equipment and facilities.
According to Hartman, the APT’s $575,000 state appropriation covers the bulk of its staff salaries, as well as the paying for the cost of airing “OPEN/net” each week.
Paul Chesser ([email protected]) is associate editor of Carolina Journal.