A study commissioned by the Milwaukee Federated Library System identified problems and proposed organizational strategies towards their solution. A manifest problem with research and reference service cost allocations led to Milwaukee County's withholding of funds, while latent problems were identified in the interlibrary book circulation system. Five alternative organizational configurations for this metropolitan interlibrary system were developed and evaluated. Tentative assessment suggests that an organization similar to the existing system but without county participation would be both feasible and effective, though reconsideration of system-state relationships and possible amended legislation might be required. Prevailing cost allocations were recognized as a basic problem threatening eventual disintegration of the system. Alternative approaches to estimating and allocating service costs were simulated for selected services, and analyzed to develop recommendations for negotiating new rate structures. Recommendations were made for the system's organization and governance, and for modification in system-state relations. (LMM)