Library trustees throw book at foundation

Noaki Schwartz

NEWPORT BEACH -- Library trustees have demanded their primary

fund-raising body to move out of the Avocado Avenue building and leave

its $1.5-million endowment fund at the door.

“I think we’re on a bad road,” sighed David Carmichael, chairman of the

Newport Beach Library Foundation.

In a letter to the foundation dated Jan. 18, the Newport Beach Library

Board of Trustees said the two organizations’ relationship would be

dissolved unless foundation members signed a cooperating agreement to

give the trustees greater financial control.

“We have spent countless hours on this. If [the foundation] wants to use

the good name of the library and rent free office space, we need a

minimal understanding of how they are conducting their business,” said

library board chairman Jim Wood.

In addition to clearing out its office in the library, the trustees’

ultimatum requires the foundation to change its name and surrender the

$1.5 million it has collected during the past six years for the library.

However, foundation members say they won’t sign the agreement, standing

by their belief that they must legally be independent from the board of

trustees.

Even Wood admitted that while the trustees can force the foundation to

move out of the library, they can’t force it to change its name or turn

over the money.

This latest episode in an ongoing battle over financial control of the

foundation’s donations dispels the faint hope that all would be resolved

by the end of January. Toward the end of last year, both groups tried to

hammer out a cooperating agreement, outlining their relationship.

Yet, when Carmichael took the finished document back to the rest of the

foundation’s members for approval, they rejected it, saying it was

lopsided and legally compromised their nonprofit status.

Foundation members then came up with their own version, which was

rejected by an exasperated board of trustees, who say they are fed up

after a yearlong effort to pin down the foundation’s financial

activities.

The relationship between the two bodies is symbiotic. While the nonprofit

foundation raises money for the library, the trustees decide how the

money is spent.

The foundation, which was formed in 1994, has raised more than $2 million

-- most of which is in an endowment fund intended to help the library

weather bad financial times. However, despite the large figures, the

foundation’s annual donations account for just about 3% of the library’s

budget.

Regardless of the outcome of the feud, it is unlikely the trustees will

gain the financial control they seek. Carmichael said the foundation

can’t legally give the trustees financial control because of its

nonprofit status. Should the foundation dissolve, it has already been

decided that the money would go to the Orange County Community

Foundation.

Members of the nonprofit are now at a loss and are hoping that the City

Council will step in to help the situation at tonight’s study session.

“I’m absolutely beside myself with grief,” said longtime foundation

supporter and former Councilwoman Lucille Kuehn.

However, Councilwoman Norma Glover, who requested an outline of the

foundation’s and trustees’ roles for tonight’s meeting, said the council

may not have any authority over the two bodies.

“We can give a directive,” she said. “I’m hoping that who has what

authority will be clarified.”

The dispute publicly surfaced last fall when the trustees sent a letter

demanding the foundation to reduce its operating costs, provide clear

financial reports and give greater control to the trustees. Otherwise,

the trustees warned, they would sever ties with the nonprofit.

The two groups began to hold facilitated discussions, and after some

success, started meeting alone. However, despite their well-intended

efforts, their perspectives were simply too far apart to end the dispute,

said sources on both sides.