Rancho Mirage Friends and Foundation Settle Major Financial Dispute
The Friends of the Rancho Mirage (CA) Public Library will hand almost all of its $2.2 million in assets over to Rancho Mirage and dissolve itself, under the terms of a settlement agreement which will end the city’s lawsuit against the organization. Report from My Desert News.
The city is to get $310,000 from the Friends’ account within a week to cover Library programs, improvements to the Community Room and other items included in the city’s funding request to the Friends from last August. About $1.8 million will be transferred to the Rancho Mirage Public Library Foundation, which the city formed as a replacement library fundraising arm when it filed suit in September.
The settlement ends a dispute which erupted in the fall of 2008, when the Friends board gave approval to buying a $25,000 sponsorship of the Palm Springs International Film Festival, a transaction never made after some board members raised objections.
This led to the city’s discovery that the Friends board had changed its bylaws, without notifying city officials, to eliminate an annual, automatic transfer of funds. The city had overlooked the end of the fund transfers.
The Friends board said most of the money it had in the bank was designated by donors to be in an endowment, set aside to draw interest, and not spent itself.