The Ann Arbor (Mich.) District Library may have to apply for tax anticipation notes to cover a deficit of more than $1 million confirmed by a financial audit in January. The notes are a way of borrowing money in anticipation of future tax-generated revenue. “There are no good alternatives,” library financial consultant Robert Zimmerman told the trustees at their February 23 meeting, noting that the only other possibility would be staff reductions.
Some 80 people attended the meeting to find out why such a large shortfall was not detected sooner, according to the February 24 Ann Arbor News. Although Director Mary Anne Hodel and the library board admitted to sharing the responsibility, fingers were pointed to former Finance Director Donald Dely, whose optimistic financial reports led to overspending. Dely resigned late last year after the board learned of the problems in August.
Board President Richard Dougherty told American Libraries that Dely’s monthly reports were “fiction,” and that even Zimmerman could not figure out where his figures came from. “Just last week,” Dougherty said, “we found in Dely’s desk an invoice for $130,000 that had been sitting there for two months and was not on the books as an encumbrance.”
The library is considering other measures to contain costs for the rest of the year, including limiting acquisitions to best sellers, canceling its newsletter, and freezing vacant staff positions.
Posted February 28, 2000.