(2) Solely for the purposes of this paragraph, the term "municipality" shall:

(i) not include a city with a population of one million or more,

(ii) mean only a county when the public libraries located in such county are members of a federated public library system whose central library is located in a city of more than three hundred thousand inhabitants. 2. In the case of a joint public library authorized to be established by two or more municipalities or districts pursuant to section two hundred fifty-five of this chapter, the governing bodies of the participating municipalities and districts shall enter into an agreement designating the treasurer of one of the participating municipalities or districts to be the treasurer of the joint public library. The agreement shall be for a period of not less than one year nor more than five years and the state comptroller and the commissioner of education shall be notified in writing by the board of library trustees of such agreement and designation. The municipality or district whose treasurer is designated to serve as treasurer of a joint public library may be compensated for the services rendered by such official to the library. The amount to be paid for such services shall be determined by agreement between the governing body of the municipality or district and the board of library trustees, and shall be paid at least annually from the public library fund. 3. The treasurer of a joint public library shall maintain the separate library fund required by subdivision one of this section and shall credit to such fund all moneys received. The state aid apportioned to a joint public library, amounts appropriated by participants toward its support and all amounts received from other sources shall be paid to the library treasurer. Appropriations for the library made by the participating municipalities or districts shall be paid in full to the library treasurer within sixty days after the beginning of the library fiscal year. Disbursements for purposes of a joint public library shall be made by the treasurer in the manner prescribed in subdivision one of this section. Within thirty days after the close of the fiscal year the treasurer shall make an annual report of the receipt and disbursement of library moneys to the board of library trustees and to the governing body of each of the participating municipalities or districts. 4. Notwithstanding the provisions of subdivisions one and three of this section, the library trustees may by resolution establish a petty cash fund, in such amount as they shall determine, for any employee who has supervision of any library or branch thereof. Expenditures from such fund may be made by such employee in advance of audit by the library trustees, but only after the submission of properly itemized and authenticated vouchers for materials, supplies or services furnished to the library or branch thereof and upon terms calling for payment to the vendor upon the delivery of any such materials or supplies or the rendering of any such services. At each meeting of the library trustees a list of all expenditures made from such fund since the last meeting of the trustees, together with the vouchers supporting such expenditures, shall be presented by such employee to the library trustees. The trustees shall direct the treasurer to reimburse such petty cash fund in an amount equal to the total of such bills which the trustees shall so allow. Any of such bills or any portion of such bills which the library trustees shall refuse to allow shall be the personal liability of such employee and he shall promptly reimburse such petty cash fund in the amount of such disallowances. If such reimbursement has not been made by the time of the first payment of salary to such employee after the action of the library trustees in disallowing an amount so expended, such amount shall be withheld from such salary payment to such employee and, if necessary, subsequent salary payments and paid into such petty cash fund until an amount so disallowed by the library trustees has been repaid in full to the petty cash fund.