Public Library Investments
Public library boards of trustees are granted the authority to control property by New York State Education Law §226 and §260. Several other State laws, regulations and legal opinions govern the manner in which public and private funds can be invested. Libraries seeking guidance in proper investment practices are encouraged to seek legal advice before doing so. Some direction can be found by reviewing Comptrollers Opinion 95-30 (link below). That opinion cites several laws, opinions and rulings that govern investment of bequests and surplus funds by public libraries.
In brief, the following excerpt from the Comptroller's Opinion summarizes the situation:
"Accordingly, based on the provisions of General Municipal Law, §11, as amended by chapter 708 of the Laws of 1992, it is our opinion that moneys held in the custody of the chief fiscal officer or other officer of a public library, whether obtained from public or private sources, may be invested only as prescribed in General Municipal Law, §11, except that investments of gifts, grants or bequests in the form of a true trust are subject to the "prudent investor" provisions of Estates, Powers and Trusts Law, §§11-2.2 and 11-2.3."
This would seem to indicate that if a library receives a bequest, gift or grant that consists of stocks and bonds, the library could continue to invest those funds in stocks and bonds provided they follow the "prudent investor" provisions of Estates, Powers and Trusts Law. However, it does appear that no new monies can be invested in this manner.
Again, it is advised that a library seek a legal opinion if there any specific questions regarding proper investment practices.
Full text of Comptrollers' Opinion 95-30