donations going into operating costs necessary to run the foundation -- a
charge disputed by foundation officials.
The trustees claim the foundation is spending anywhere from 50% to 70% of
the money on operations, said chairman Jim Wood. However, foundation
members maintain the organization runs at below 15% of total donations,
which is typical of libraries.
A key element to that conflict is a disagreement over what constitutes
operating costs. For example, the cost of putting on the Distinguished
Lecture Series is considered by trustees as an operating cost, whereas it
is counted as a program in the foundation's budget.
"It's money we have to spend in order to get money to give to the
library," said foundation member Jim Rubel.
Sally Cullman, the development director at the Los Angeles City Library
Foundation, agreed with the foundation. The Los Angeles foundation
considers any public event as a program cost and not an operating cost.
"The whole role of the library has changed in the last 10 years -- it's become more of a cultural center," Cullman said. It's not just about
books anymore, she added.
The foundation began building the endowment fund, which has a goal of
$2.5 million, in 1997 to insulate the library from the city's budgetary
ups and downs, Carmichael said.
Former mayor and foundation member Clarence Turner said he had "watched
the coffers slowly drained" during the budget crunch from 1991-94 and
didn't want the library to fall victim to future economic crises. The
idea was to use the $120,000 expected in annual interest from the
endowment fund as a steady stream of income to support the library.
But in the meantime, that means less money will go to the trustees. For
example, the $83,535 earmarked for the library in this year's budget is
about 42% less than the average amount given during the last five years,
according to financial records.
That difference appears to be what is fueling the dispute. While the
trustees may feel they are losing control over the money, foundation
members say the trade-off is long-term security with the endowment fund.
The foundation was created in 1994 as the nonprofit fund-raising arm of
the library. Its relationship with the trustees is symbiotic, in that the
money raised is then handed over to the board, which decides how it's
spent. Funds generally go toward books, the literacy program and new
technology.
The trustees first approached the foundation about the perceived problems
a year ago without much success, Wood said. The more the trustees pressed
the foundation, the less willing they were to talk, he said.
"The agitation grew. They wanted independence and we wanted
accountability," he said. "The more we needed to communicate, the more
difficult it got."
But foundation members remember it a little differently. They said they
really didn't know there was a problem until they received the strongly
worded letter in October.
Both parties, however, have said the problem has been more of a
communication gap than anything else. By opening lines of communication
and having more consistent dialogue, they hope to resolve most of the
issues.
Regardless of when the dispute started, which remains a point of
contention, one thing is for sure -- everyone is ready to come to the
table and solve the problem.
The foundation members, trustees and the city manager all predict they
will be able to reach that agreement by the end of the year.
