Decision No. 13,512

(November 11, 1995)

Bartlett, Pontiff, Stewart & Rhodes, P.C., attorneys for respondents, J. Lawrence Paltrowitz and James R. Burkett, Esqs., of counsel

MILLS, Commissioner.--Petitioners file seven separate applications seeking the removal of five members of the Board of Education of the Lake George Central School District and two school officials ("respondents"). Because the applications raise the same legal issues, I have consolidated them for decision. The applications must be denied.

Petitioners claim that respondents have engaged in a pattern of overestimating school district expenses and have therefore incurred significant surpluses at the end of the school year in violation of Real Property Tax Law '1318 ("RPTL"). Petitioners allege that this practice occurred in the 1991-92, 1992-93, 1993-94 and 1994-95 school years.

Under RPTL '1318, at the conclusion of each fiscal year, a board of education must apply any unexpended surplus funds to reduce its upcoming tax levy for the current school year. "Surplus funds" is defined as "any operating funds in excess of 2% of the current school year budget, and shall not include funds properly retained under other sections of law." Accordingly, at the end of each school year, a board of education may not retain more than 2% of its surplus funds for expenditures the following year, and must use the remaining surplus funds to offset its upcoming tax levy. The record in this case indicates that the district retained surplus funds in excess of amounts permitted by RPTL '1318 in previous years.

Petitioners assert that because respondent board members signed tax warrants which certified that unexpended surplus funds were applied in determining the district's tax levy for the years in question, and those "carryover encumbrances" exceeded the amount permitted under the RPTL, respondents should be removed from office under Education Law '306. Petitioners also seek the removal of the superintendent of schools and the assistant superintendent for business because they allegedly assisted in the preparation of the school district's budget for the years in question and were present when the tax warrants were signed. Petitioners seek the suspension of the above-named individuals from office until a hearing can be held on their removal. Petitioners also seek an order directing respondents to desist from overstating future district expenditure budgets and to strictly adhere to the requirements of RPTL '1318. Finally, petitioners request that I preclude respondents from recovering legal fees related to this application.

Respondents contend that the petitions are untimely with respect to the 1991-92, 1992-93, 1993-94 and 1994-95 school years. Respondents also contend that any claim relating to the 1995-96 fiscal year is premature since the amount of any surplus funds has not yet been determined. Respondents further claim that the RPTL's limitation on surplus funds to 2% of the current year's budget is unrealistic in view of the timing of State aid payments and other fiscal factors. Respondents also argue that the petitions fail to state a claim for removal and that an assistant superintendent for business is not subject to removal under '306.

Before reaching the merits, I will address respondents' procedural arguments. Section 275.16 of the Commissioner's Regulations requires that an appeal to the Commissioner of Education be commenced within 30 days from the making of the decision or the performance of the act complained of. These applications were commenced on April 11 and June 13, 1995, both more than 30 days after the close of the district's 1991-92, 1992-93 and 1993-94 fiscal years. Consequently, those portions of the applications that relate to respondents' fiscal practices in those years are untimely. Petitioners' claim with respect to the 1994-95 fiscal year, however, is timely because petitioners brought these applications within that fiscal year.

Respondents also raise a procedural objection to petitioners' request for the removal of Bruce Levin, the district's assistant superintendent for business. Respondents argue that school district employees are not subject to removal under Education Law '306. Petitioners agree that Mr. Levin's position as an employee is not subject to the statute. However, they point out that he is also school district treasurer, a position to which '306 does apply.

Education Law '306 provides, in pertinent part:

In view of the foregoing, I conclude that Education Law '306 is applicable to Levin in his position as treasurer of the school district.

With respect to the merits of these applications, school district officers can only be removed under '306 when they engage in a "wilful violation or neglect of duty." This means that there must be "a purpose or intent to disregard a lawful duty or to violate a legal requirement" (Application of Kozak, 34 Ed Dept Rep 501; Matter of Felicio, et al., 19 id. 414; Matter of Winograd, et al., 17 id. 213; Matter of Trigilio and Iannotta, 14 id. 385). Mere negligence on the part of a school officer is not enough to warrant removal (Appeal of Schofield, 34 Ed Dept Rep 143).

In this case, the acts about which petitioners complain do not rise to the level of wilful misconduct. While petitioners have proven a violation of the RPTL, they have failed to show any purpose or intent by respondents to disregard a legal requirement. Although respondents' budgeting practices do not comply with RPTL '1318, that fact alone, without an intentional violation of law, does not subject respondents to removal.

Respondents note that they intend to comply in all respects with RPTL '1318 for the 1995-96 fiscal years. In affidavits filed on September 15, 1995 and accepted under 8 NYCRR 276.5, respondent board members state that they adopted a tax warrant for the 1995-96 school year on August 25, 1995. The tax warrant indicates that, in compliance with RPTL '1318, unexpended surplus funds have been applied in determining the school tax levy. The amount retained was $220,897, which is not in excess of 2% of the district's 1995-96 budget of $11,044,871. Therefore, it appears that respondents have discontinued the practice in question. Respondents should endeavor to be scrupulous in their future budgetary practices, as another violation of RPTL '1318 may well now be sufficient to warrant their removal from office.

Finally, I note that petitioners' request that respondents be denied legal fees in connection with these proceedings. Education Law '3811 authorizes the payment of legal fees when certain conditions are met. Since respondents do not request legal fees, I decline to address this issue.

I have considered the parties' remaining contentions and find them without merit.

THE APPLICATIONS ARE DENIED.

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