Let me try to shed some light on the questions asked in yesterday’s article. While I am not an authority, I do have previous experience in the non-profit arena and research is my forte.
The article says:
”…Albany-based attorney Ellen Bach told local officials that, in her opinion, it is not legal to have a board member as a treasurer. She based that statement on a 1977 opinion from the Office of the New York State Comptroller, among other documents.”I just happen to have a copy of the State Comptroller's opinion which states:
”Conclusion: A member of a board of trustees of a public library may not be appointed library treasurer.Further, according to page 17 of a booklet authored by the NYS Comptroller:
March 8, 1977.”
Common Law Whitehall Doctrine "The Whitehall doctrine, as a matter of public policy, provides that a board may not appoint one of its members to a position (Wood v. Town of Whitehall, 120 Misc 124 (Sup Ct Wash Co), affd, 206 App Div 786 (3d Dept 1923)). (See also, Macrum v. Hawkins, 261 NY 193 (1933), and Matter of Brenner v. Vines, 35 AD2d 536 (2d Dept 1970). In Wood, the court decided that it would be contrary to public policy and the general welfare to uphold such an appointment. The recusal of the member of the board to be appointed does not remedy the conflict of interests (1995 N.Y. Op. Atty. Gen. (Inf.) 1074).”The State Comptroller’s Opinion, to some, is just that…an opinion. However, in this case, the State Comptroller seems to have based their decision on a court decision.
"When public officers, such as the members of a town board, are vested by the Legislature with power of appointment to office, a genuine responsibility is imposed. It must be exercised impartially, with freedom from suspicion of taint or bias that may be against the public interest. An appointing board cannot absolve itself from the charge of ulterior motives when it appoints one of its own members to an office. It cannot make any difference whether or not his vote was necessary to the appointment. The opportunity to improperly influence the other members of the board is there. No one can say in a given case that the opportunity is or is not exercised. What influenced the other members to vote as they did, no one knows except themselves. Were their motives proper, based solely on the fitness of the appointee? They may have been. Were they improper, based on the promise or expectation of reciprocal favors? (Wood v. Town of Whitehall, 120 Misc 124 (Sup Ct Wash Co), affd, 206 App Div 786 (3d Dept 1923)).
Library Trustees are public officers and as such they have to take an Oath of Office. Whether the library chooses to adhere to the Whitehall Doctrine is their choice, but why wouldn’t they, at this point, want to remove any doubt of impropriety?
Yesterday’s article also touched upon a subject that has been a sticking point for a long time…the belief of some library board members that they are a hybrid library.
Just what is a hybrid library? According to the Library of Information Science:
“The hybrid library is a term that has entered the parlance of the library and information profession in the past three years. It is viewed as a halfway step towards the fully digital library.”According to the NYS Education Dept., there are four (4) different types of libraries; hybrid library is NOT one of them.
So why does the library board think they are a hybrid library?
According to yesterday’s article:
”Mowat said the issue also is complicated by the library’s dual status as a nonprofit and a municipal library. She said it is a requirement of a nonprofit to have a board member as a treasurer who acts as oversight and reviews monthly banking activity, among others, whereas in municipal government the director of finance or comptroller does not have a position on the board.”Ah ha! They think the library is a both non profit and a municipal library. That is entirely impossible according to Education Law Section 216. A library is chartered (incorporated) by the State Education Dept. and according to Section 216 of Education Law:
”…no institution or association which might be incorporated by the regents under this chapter shall, without their consent, be incorporated under any other general law.”The library seems to be confused as to the difference between a 501(c)(3) organization and a non profit.
“Nonprofit corporate” status and “tax-exempt” status are two different things according to the IRS faqs:
• Nonprofit status refers to incorporation status under state law. • Tax-exempt status refers to federal income tax exemption under the Internal Revenue Code.Education Law Section 216 establishes the fact that the library cannot incorporate under state law, but they can be a 501(c)(3) public charity; although it is not necessary; it only creates an added expense for preparing the 990.
According to the IRS, a library is automatically exempt from Federal taxes to include Federal Unemployment Tax and they do not need to file a 990. Under IRS rules, a municipal library is considered an instrumentality and would be exempt from Federal taxes and contributions would be tax-deductible so there really is no need for the library to have a 501(c)(3).
According to the IRS faqs:
”For non-tax reasons, though, government entities are sometimes asked to provide a tax-exempt number or determination letter to prove their status as a tax-exempt organization.”So perhaps a call to the IRS might be in order.
”The IRS will issue a letter describing the tax status of government entities. Most organizations and individuals will accept this letter as the substantiation that they need. No application is required, and no fee is associated with this letter.”
One last thing, the library board needs to figure out whether they want to be a nonprofit or a municipal library because as a nonprofit it would be against the NYS Constitution Gifts and Loans clause for the town to give the library taxpayer dollars absent a contract with the town, and each village.
Frankly, this writer, who is also a taxpayer, is tired of hearing that the library is a “hybrid library” and yet they turn to the taxpayers every time they want money.
Get it together New Hartford Public Library Board of Trustees!!!