Decision No. 13,761

(April 21, 1997)

Bartlett, Pontiff, Stewart & Rhodes, P.C., attorneys for respondents, Martin D. Auffredou, Esq., of counsel

MILLS, Commissioner.--Petitioners claim that respondent retained unexpended surplus funds as of June 30, 1994 in violation of Real Property Tax Law ("RPTL") '1318. The appeal must be dismissed.

Petitioners request that respondent set aside the excessive tax levy from the 1994-95 and previous school years for return to the taxpayers, that I order respondent to comply with the RPTL in establishing its tax levy for 1995-96, and that a vote scheduled for August 22, 1995 on three propositions to be funded from the district's general fund balance on June 30, 1995 be stayed. Petitioners' request for interim relief pending a determination on the merits was denied on July 28, 1995.

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 two percent 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 percent of its surplus funds for expenditures in the following year, and must use the remaining surplus funds to offset its upcoming tax levy.

This appeal presents the same issues petitioners raised in a prior appeal, Application of Morris, 35 Ed Dept Rep 193. The doctrine of collateral estoppel precludes petitioners from relitigating these issues. In that case, which sought the removal of board members, the treasurer, and the superintendent of schools, I concluded that petitioners had proven that respondent's 1994-95 budget was not in compliance with the RPTL. However, since petitioners had failed to show any intent by respondents to disregard a legal requirement, I did not remove the respondents in that case from office. I also concluded that respondent had applied unexpended surplus funds in determining the school tax levy for the 1995-96 school year, and that the amount retained as of June 30, 1995 was not in excess of the 2 percent requirement of '1318.

The appeal must be dismissed because petitioners' claims for relief are now moot. It is well settled that the Commissioner will decide only matters which are in actual controversy and will not render a decision upon facts which no longer exist or which subsequent events have laid to rest (Appeal of Berheide, 35 Ed Dept Rep 412; Appeal of Healy, 34 id. 611; Appeal of Lanoir, 34 id. 562; Appeal of Hartmann, 32 id. 640). Although respondent's 1994-95 budget was not in compliance with RPTL '1318, unexpended surplus funds were applied in determining the school tax levy for the 1995-96 school year, and the amount retained was not in excess of 2 percent of the district's 1995-96 budget.

In light of the disposition of this appeal, I need not reach the parties' remaining claims.

THE APPEAL IS DISMISSED.

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