Council OKs selling surplus books to Friends of the Library after discussion on audit issue

An item that was pulled from the consent agenda of last Monday night's Marshalltown city council meeting at the request of Councilor Gary Thompson reignited a conversation and debate regarding the Friends of the Marshalltown Public Library, a nonprofit organization dedicated solely to assisting the library, over its lack of an audit and subsequent "adverse" ruling as part of the city's larger annual report.

The pulled item on the consent agenda would have authorized the library to sell surplus items to the Friends for its annual book sale at a total cost of $500, and Library Director Sarah Rosenblum explained that the MPL is not an archive, but an "active community hub" with collection management practices mirroring national and state standards.

She added that she could speak for an hour about library management but would "bow down" to Thompson to hear why he pulled the item. After remarking that he loved the library, Thompson raised the issue with the Friends and its refusal to let the auditors who check the city's finances see "certain things" in its books, resulting in an adverse opinion for the last two years.

"Personally, I don't want to do business with this organization and sell them these books... The only thing I'm opposed to is selling them for $500 to the Friends of the Library. I don't want to be in business with a company that's refusing to let our auditors see their books, and the result is an adverse opinion on our audit, which is not a good thing for us," he said. "That's my whole point. It's nothing to do with the library, the wonderful staff, the facility, the meeting room, the new podcast room that I'm not supposed to talk about because you don't have it ready, but that's it. It's just simple. I don't want to do something to benefit the Friends of the Library."

In response, Rosenblum noted that the Friends have donated $1.3 million to the library in the last few years.

"Their whole mission, they're a 501(c)3, is to support the Marshalltown Public Library. They were instrumental in getting the levy approved. Unfortunately, the state took it away, and I believe the Friends, back in 2000, when people started talking about a library, helped lead that drive," she said. "So I would respectfully disagree. The Friends support the library, advocacy, and they give money. So that's all they do."

All of the money raised through the annual Book Sale, Rosenblum said, ends up supporting the library in one way or another. Thompson reiterated that he wasn't questioning the mission of the organization but wanted the auditors to be able to see what they needed to see to produce a clean opinion.

Rosenblum said the Friends file their taxes and 990 forms and have "honorable intentions," and she cited a section of Iowa Code authorizing the disposal of library materials to a private agency to raise funds for support of the library. Using rough math, Thompson speculated that they were selling roughly $100,000 worth of books for $500, but Rosenblum countered that many of the books they sell -- such as a memoir by erstwhile New Jersey Gov. and presidential candidate Chris Christie or a textbook from the 1940s -- are now irrelevant or simply aren't circulating at the library.

"We are a popular library. We are not Iowa State or the University of Iowa. People come for the new James Patterson book," she said.

Some of the books being removed from the collection are out of date in terms of laws, so they won't be sold at the sale, she said. Others, like "How to Troubleshoot Gas Engine Repair," could be sold to "the right person" at the annual sale.

Mayor Mike Ladehoff then welcomed new Finance Director Cole O'Donnell to the microphone, and he explained that library books are considered assets on July 1 of the year they are purchased, but there are differing opinions on depreciation. The Internal Revenue Service (IRS) standard is that anything over five years old has zero value, and O'Donnell recommended following that protocol.

Councilor Sue Cahill asked if any other individuals or organizations had the opportunity to purchase the books besides the Friends of the Library, and Rosenblum said they have been offered to smaller surrounding public libraries across Marshall County in the past. Rosenblum also expounded further on the process of "weeding" the collection and rotating the books, and she admitted that she found the ordeal "frustrating" but would avoid saying anything "inappropriate" as she plans to retire soon.

"We are here to support the library and the community, and that's what we do," she said.

Councilor Greg Nichols asked Rosenblum why the Friends wouldn't help the city secure a clean audit.

"I think the Friends feel that they are doing what they're supposed to do legally, and they had several discussions. I was not privy to all those discussions," she said. "I don't feel comfortable, but I know that an audit was gonna cost over $10,000."

Nichols interjected that it was the city's auditors asking the questions, not a separate audit of the Friends, and City Administrator Carol Webb said the Friends would have had to pay for an audit that would be turned over to the city -- but the city offered to pay the cost.

"The city offered to pay for it, but the indication that we got was that these are volunteers that don't really have the time to manage an audit process, so that was what was communicated to us," Webb said.

Rosenblum cited her experience working with Friends groups in other communities and said the Marshalltown organization has been top notch.

"People trust the Friends, and I'm kind of frustrated by this whole thing," she said.

Ladehoff felt confident that a solution could be reached in working with O'Donnell, and the mayor noted that some people leave large sums of money to the Friends in their wills -- many of them not wishing to be recognized at all.

According to Rosenblum, new Friends President Conny Schutte is interested in working toward a constructive solution. During the public comment period, Rick Lang wondered why so much "shade" was being thrown at an organization that had donated so much money to the library in recent years and called it "shameful."

April Long, a new member of the Friends board, said she did not know much about the financial situation, but she had previous experience with nonprofits as the former director of the Senior Citizens Center.

"I guess I don't understand how the city government thinks they can be so involved in an independent 501(c)3 nonprofit. Again, I'm a new member of the board, so I don't know all the ins and outs, but I do know it's a fine group of volunteers giving their time and their energies and their resources to support a community asset," she said.

Tim Bradbury questioned why the library is against "some of the conservative issues" and felt an audit was justified. Erin Carpenter, noting the Friends' status as an organization solely in service to a city department, wondered why the rules governing their audits were different than some of the other nonprofits the city works with not subject to those rules, though she didn't specify which ones.

A motion to approve the sale as originally outlined passed by a 6-1 tally with only Thompson opposed, but Nichols did add that he would still like to see cooperation. Before the council moved on, Rosenblum invited the council and everyone in the audience to see the new and renovated spaces at the library, including the podcast studio.

The T-R reached out to O'Donnell and Schutte after the meeting to ask about the next steps, and O'Donnell responded that he had not yet had time to give the matter his "full attention."

"I will be discussing with our auditors what could be used to satisfy the requirements short of an actual audit of their books," he said.

Contact Robert Maharry at (641) 753-6611 ext. 255 or rmaharry@timesrepublican.com.