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  • Mamaroneck Observer

Village Offers Loan to Library

By Kathy Savolt -

In an extraordinary step, the Village of Mamaroneck Board of Trustees (BOT) discussed directly lending the Library $1,246,000 to help the Library continue to turn their finances around.

This offer came after the Library requested the planned second disbursement from the Tax Anticipation Note (TAN) that the Village had secured on their behalf in June. Some Village officials expressed concern that the Library Board was taking the appropriate measures. Trustee Lou Young accused the Board of “not taking this seriously.” However, things turned around after a meeting last week between officials from both the Village and the Library.


The Library Board of Trustees discovered a budget shortfall in early 2023 and alerted Village officials that they were in danger of closing their doors. Since that time, many steps have been taken to both understand what happened and remedy the situation.

The Village borrowed $1,411,210 (before fees) to be distributed to the Library in three disbursements: $300,000 was disbursed in June and the remainder was scheduled for $850,000 in September and $261,210 in December.

Almost immediately, the Library Board hired a forensic auditor, Nawrocki Smith. The forensic audit is complete and in the hands of the Westchester County District Attorney’s office where their investigation continues. The report has not been made public, but the broad findings were reported at the BOT meeting.

Nawrocki Smith auditors determined, and the Library’s auditors agreed, that the largest financial issue was due to misreporting that led the Library Board to believe funds existed that did not. These phantom funds, supposedly held in reserve, had been used to balance the budget and keep the tax increases low for a few years. This practice finally caught up with reality when the budget called for the use of more reserve funds than existed.

What caused the misreporting?

Originally the Library Board stated that there was some misappropriation of funds by a former employee. Given the involvement of the DA’s Office, that is still a factor, and the Library previously said the amount was “in the tens of thousands.” At the BOT meeting, Ellen Hauptman stated that most of the problem was caused by “bad journal entries.” A quick look at the financial audits on the Library website reveals long lists of journal entries that the auditors suggested the Library make. Apparently, these entries were never recorded.

Poor accounting practices and inadequate Board oversight clearly contributed to the problems. According to Library Board President Ellen Freeman, the Board took “ownership” and immediate action to correct these omissions. New financial controls were instituted and Board member Ellen Hauptman, scheduled to join the Board in June, filled a vacant seat early. Hauptman has extensive financial experience. A new bookkeeper was hired and a volunteer, Richard Aks from Larchmont, stepped forward to act as co-treasurer and advisor to the Board. Aks has years of experience in not-for-profit finance and is currently on the board of Mercy University.

The Library Board is also more transparent and has posted financial information and reports on their website. See HERE.

A Hard Look and a Revised Budget

More importantly, the Board has taken a hard look at their revenue and expenses. With the help of a volunteer Budget Committee headed by Hauptman, the Library has identified areas to trim back. They have reduced staff through attrition, eliminated overtime, and are reviewing all contracted services. When the non-existent reserves were removed from this fiscal year’s budget, there was a deficit of $866,000. The TAN and actions by the Library have brought the deficit down to $141,000 with plans to bring it to zero.

Since the issue became public, about $59,000 has come in from donations plus a pledge for an additional $50,000. Both Freeman and Hauptman thanked the community for their support. Freeman acknowledged the “era of outrage” and heard the anger of the community but said there has also been an “outpouring of support.”

Current Situation and Future Projection

When the BOT approved the issuance of the TAN, they had added a stipulation that they had to “be comfortable” with the Library’s actions before the disbursements were released. After reviewing the Library’s changes and information, the BOT authorized the second distribution of the TAN to be made around October 1st. The vote was 5-0. Afterward, Trustee Young clarified his earlier remark by saying that information was all he needed.

Since TANs are short-term notes, the Library had originally anticipated borrowing every year for a few years until they no longer needed to borrow funds to balance the budget. However, Hauptman is now projecting that 2024 will be the final year the Library will need to borrow operating funds.

Village Offers an Alternative

Calling Village Clerk-Treasurer, Augie Fusco, a “genius,” Village Manager Jerry Barberio described Fusco’s plan in which the Village would repay the entire Library TAN in June 2024 and the Library would repay the Village over three years at 2.5% interest. This would save the expense of issuing another TAN, give the Village another source of revenue (interest), and give the Library the opportunity to start to rebuild its services and begin to spend money on books (for example) sooner. The total loan would be $1,246,000 which is comprised of the TAN disbursements, interest on same, and $30,000 in interest to the Village. Annual payments from the Library to the Village would be $415,333. This would negate the need for an additional TAN.

This idea was put before the Library Board at their meeting on September 27th and supported with a 9-0 vote. Hauptman is now putting the Library’s proposed budget together for the December 6 election and will incorporate this new plan.

Next Year (2024-25)

To meet the 30 day deadline for the election, the Library Board must vote on the final proposed budget at their October 11th meeting. This budget includes a 6% expense reduction and a 6% tax increase. For the Library Board to vote on a final proposed budget, the BOT will have to approve this loan to the Library at their next meeting on October 10th.

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