Our Library Director was hired 5 years ago and has always been paid for her attendance at monthly Trustee meetings. In 2021 the Town Supervisor stopped this long-standing practice. Our Town pays our Library Director.
Is this legal without letting the Trustees and Director prior to stopping the practice?
"Is this legal?" Not likely.
But before I say more, I just want to offer a quick primer on how things work at "Ask the Lawyer."
Since the situation depicted in the question could result in legal claims by the Director, the board, and/or even the Town--or be relevant to an audit by the State Comptroller--this is the type of "Ask the Lawyer" question that can only be answered--really answered--under attorney-client privilege.
Why is that? Because of how "Ask the Lawyer” works. When questions like this are submitted (questions that ask for advice and guidance for the requesting member and their council, as joint clients), our typical approach is to a) contact the member, b) get any additional information needed to assess the question, and then c) send an attorney-client privileged answer. 
After that, if the member consents to it, we create a "generic" answer, channeling the research gathered into general advice that may be useful for a broad audience (of libraries, museums, historical societies, and other regional council members).
This question, of course, presents an issue mostly relevant to public libraries. And here is the "generic" answer to the scenario presented:
There are a number of factors an attorney needs to dig into in order to answer this question.
First: is the director an hourly employee, or salaried? If salaried, this question doesn't make much sense, so we'll go with hourly.
Second: Is the director required as part of their job to attend the meeting? Since they are mostly there in their professional capacity, let's say "yes."
Third: Did the director, in the past, report the hours into the payroll system, and receive compensation for them? Let's again say "yes."
Fourth: Has the board consistently performed the aspects of board authority over the position (making the decision to hire, signing the hiring letter, performing annual reviews, working with Civil Service to amend the job description when needed, effecting disciplinary action and plans of improvement if needed, approving payroll, approving scheduled vacation times, overseeing time off for disability, effecting termination)? Again, from the scenario, we'll say "yes," which means the board has not laid a foundation for the lines of employment to be blurred (they are undisputedly in charge).
Fifth: Has the previous payroll, which included compensation for attending the meetings, been approved per the requirements of the Civil Service law? While that may be something happening subtly behind the scenes, based on the scenario, again it is probably "yes."
If we added those details to the scenario, I would see no basis for a town official to be able to unilaterally decide what tasks may or may not be compensated.
In fact, the only way I could see a town official being able to (legitimately) do such a thing is if the library board had expressly delegated all authority for supervision and payroll oversight to the town...something that would be a dangerous practice, since it would seriously undercut the library board's autonomy and authority.
The courts in New York, the State Comptroller, the State Attorney General, and local Civil Service agencies all grasp the nuances of public library boards' authority, but it can be a struggle for newer public officers. The autonomy and authority of a library board can often feel like a square peg to a public official used to only round holes. That is why it is important to nurture the relationship routinely, deliberately, and carefully.
What can be done in this case? To avoid a claim of unpaid wages, a library board would need to develop a plan to put things right. There are a number of ways to approach this, but I'd start out by enlisting the help of the local Civil Service, who can confirm that the library is a separate employer, with an obligation to confirm their employees' hours. In the alternative, a good resource who may take a similar technical approach could be the municipality's attorney.
Since all that could take some time, if the board wants to vote to adjust the payroll (ensuring the payment is properly subject to taxes and withholding, etc.), the board may also want to enlist the help of the State Comptroller (the authority that audits public library payroll from time-to-time). How would a library do that? Prior to any adjustment, it would be a good idea to confirm the basis for the correcting payment in writing with the Comptroller, after which the board could resolve to make the adjusting payment (since the minutes of the meeting, and the meeting itself, are a public record, this is a good exercise in transparency).
Because of the risks involved in compensation-related matters, if at all possible, this type of challenge is a good one to work through with an attorney.
 More on this approach, piloted in consultation with Sheryl Knab at WNYLRC (who was very patient as I unpacked all the nuances about attorney ethics and retainer agreements), is described in Hope Dunbar’s excellent article: https://www.tandfonline.com/doi/abs/10.1080/15332748.2018.1443572
 Sometimes, if the issue is sensitive enough (and there is no reason to involve them) the answer doesn't even go to the council.
 It could be relevant in the sense that the salaried employee was using the meeting time to hit a minimum amount of service for the work-week (say, 37.5 hours). But that nuance doesn't quite fit the scenario.
 Note this says "approving," not "effecting." A municipality can process the payroll and provide the employment benefits, and the library board of trustees remains the actual employer.
 Two great primers on how Civil Service Law impacts hiring library directors in New York are found at: http://www.nysl.nysed.gov/libdev/trustees/handbook/cs101.htm, and https://www.nyla.org/a-librarians-guide-to-civil-service-in-nys-2018/.
 The New York State Comptroller has understood the nuances of the library board-municipality relationship for decades. See 1972 Op St Compt File #402.
 I realize that might not be the case in some localities. If that is the case for your library, you may want to skip this step, and head to the Comptroller.
 The case at this link, Beers v. Incorporation City of Floral Park, from 1999, shows why! https://casetext.com/case/beers-v-incorporated-village-of-floral-park