Decision No. 14,166

(July 22, 1999)

MILLS, Commissioner.--Petitioner appeals the actions of the Board of Education of the South Orangetown Central School District ("respondent") in preparing the proposed budget for the 1998-99 school year. Petitioner further appeals the hiring of a new superintendent, Eileen Gress. The appeal must be dismissed.

In March 1998, respondent prepared a proposed budget for the 1998-99 school year, which provided for the expenditure of $40,416,335. Respondent held two meetings, on March 14 and March 21, 1998, to allow public comment. The proposed budget included a large reduction in the allocation for staff development. At its meeting on April 1, 1998, respondent restored $25,000 of funding for staff development for the ensuing school year and adopted a revised proposed budget of $40,441,335, to be presented to the voters at the district meeting on May 19, 1998.

At the April 1, 1998 meeting, respondent also voted to transfer $100,000 in its 1997-98 budget from the general fund to the business administration equipment and supervision equipment line items. The $100,000 had been received through a grant from the State and placed in the general fund. Once respondent determined that the money should be used to upgrade existing office technology, the funds were transferred to the appropriate line items.

The position of school superintendent was vacant as of the April 1 meeting. For purposes of the proposed budget, respondent estimated the amount to be appropriated to the superintendent's salary line at $131,885. Subsequently, on April 23, 1998, respondent signed a contract with the new superintendent, Eileen Gress, which provided for a salary of $142,000 plus benefits. The record indicates that the full amount of the compensation paid to Ms. Gress was disclosed pursuant to Education Law "1716. The parties agree that the details of the contract also appeared in local newspapers, although petitioner states that this disclosure did not occur until he had requested a copy of the contract pursuant to the Freedom of Information Law.

Respondent held another public hearing on May 6, 1998, to afford an opportunity for public comment on the newly revised budget proposal. A copy of the final proposed budget, as submitted to the voters at the district meeting, was available at the May 6 hearing. Notice of this hearing was advertised in only one newspaper, the Rockland Journal News. Although respondent provided correct information to the Rockland Journal News, the newspaper incorrectly advertised the date of the hearing as May 5, 1998.

At the May 6, 1998 budget hearing, respondent also approved the transfer of funds totaling $507,778.55 in the 1997-98 budget, from a number of line items into different line items, due to insufficient funds in the receiving line items. The proposed 1998-99 school year budget was presented to the voters on May 19, 1998, and was approved by a vote of 1,266 to 1,064. This appeal ensued. Petitioner's request for interim relief was denied on June 2, 1998.

Petitioner raises several claims in this appeal. Petitioner first contends that respondent purposely overestimated certain budgetary items in the 1998-99 budget, and that respondent has engaged in a pattern of misrepresenting and overestimating the funds needed to conduct the business of the school district, so that it can later transfer those excess funds to other items without the public's notice. Petitioner additionally asserts that respondent improperly adopted a second revised budget, to cover the additional cost of the superintendent's compensation, and improperly made changes and transfers to aid the central administration portion of the budget. Petitioner further asserts that respondent failed to give proper notice of the May 6, 1998 hearing to allow public comment on the revisions. In addition, petitioner challenges the propriety of the $100,000 transfer of funds from the general fund to specific line items in the budget for the 1997-98 school year. Petitioner requests that I examine respondent's practices pertaining to the preparation and adoption of the annual budget, and declare the 1998-99 budget invalid. Petitioner further requests that I declare respondent's contract with the new superintendent null and void, and order respondent to enter into new negotiations to fill the superintendent position.

Respondent denies petitioner's allegations, and asserts that it has properly complied with the Education Law in its management of the 1997-98 budget and preparation of the 1998-99 budget. Respondent also raises two procedural objections, that petitioner has failed to join the new superintendent Eileen Gress as a necessary party, and that any challenge to the transfer of $507,778.55 in the 1997-98 budget is untimely.

I will first address respondent's procedural claims. A party whose rights would be adversely affected by a determination of an appeal in favor of petitioner is a necessary party and must be joined as such (Appeal of Heller, 38 Ed Dept Rep 335, Decision No. 14,048; Appeal of Schuler, 37 id. 512, Decision No. 13,915; Appeal of Garard, 36 id. 15, Decision No. 13,638). As petitioner specifically seeks to void the contract between respondent and Ms. Gress, relief in petitioner's favor would clearly affect Ms. Gress's rights. She is thus a necessary party. I am not persuaded by petitioner's argument that Ms. Gress was not yet an employee of the district at the time the appeal was commenced, and was a Connecticut resident "over whom the Commissioner of Education has no jurisdiction." Any relief granted by the Commissioner would be directed to respondent, over which I indisputably have jurisdiction. Failure to join Ms. Gress as a respondent to this appeal requires dismissal of the petition insofar as petitioner challenges the validity of the contract between respondent and Ms. Gress.

I reject respondent’s contention that the petition is untimely as to the challenges to transfers in the amount of $507,778.55 in the 1997-98 budget. An appeal to the Commissioner of Education pursuant to Education Law "310 must be commenced within thirty days from the making of the decision or the performance of the act complained of, unless excused by the Commissioner for good cause shown (8 NYCRR "275.16). Respondent claims that these transfers were made in March 1998, and this appeal was not commenced within thirty days so it is untimely. However, petitioner alleges that respondent approved these transfers at its May 6, 1998 meeting, and respondent does not controvert this statement. Therefore, I will not dismiss this claim as untimely.

The petition must, however, be dismissed on the merits. I will first address petitioner's claims that preparation of the 1998-99 proposed budget was improper vis-"-vis the allocated cost for the new superintendent's compensation, and that the contract with incoming superintendent Eileen Gress is thus invalid. The record shows that the proposed budget adopted by respondent on April 1, 1998 contained an estimate of $131,885 for the superintendent's salary. The final contract dated April 23, 1998 provided for a salary of $142,000 plus benefits, and respondent revised the adopted proposed budget. The actual figure for the superintendent's salary and benefits was included in the proposed budget that was made available at the May 6, 1998 public hearing and presented to the voters on May 19, 1998.

The board of education of a central school district is required to prepare a proposed school budget and present it at a budget hearing at least 7 but not more than 14 days before the district meeting at which the budget vote will occur (Education Law "1804[4]). The record indicates that respondent held two public comment hearings in March on its preliminary budget, and scheduled a third budget hearing for May 6, 1998 (13 days before the district meeting) to allow public comment on the two changes which had been made to the proposed budget since March – restoration of $25,000 for staff development and the new superintendent’s actual salary and benefits. Respondent thus complied with the requirements of "1804(4), and petitioner has not established that the budget presented at the budget hearing on May 6, 1998 and the district meeting on May 19, 1998 did not accurately state the amount of the superintendent's salary or benefits.

Petitioner's complaint about the notice of the budget meeting scheduled for May 6, 1998 is also insufficient to invalidate the adoption of the budget or the budget vote. A board of education is required to provide notice of the public hearing in its notice of annual meeting and election (Education Law "1716[2]). The record indicates that respondent included the hearing notice in the announcement it provided to the newspaper. The newspaper incorrectly published the hearing date as May 5 instead of May 6, 1998, but all of the other literature sent to district residents listed the correct date. Furthermore, there is no claim whatsoever that there was inadequate or improper notice of the district meeting held on May 19, 1998.

Petitioner fails to provide any voter affidavits to indicate that voters were misled by the publishing error, were unable to attend the May 6, 1999 public comment hearing because of the error, or would have voted differently on the budget if they had attended the hearing. Moreover, even a district annual or special meeting will not be held illegal for want of due notice unless it appears that the omission to give such notice was willful and fraudulent (Education Law "2010). There is no allegation of any willful or fraudulent action regarding the notice of the budget hearing. Accordingly, there is no basis on the record before me to invalidate the election.

Petitioner also complains in vague terms that the $100,000 budget transfer that was approved by respondent on April 1, 1998 was improper, but provides no legal basis for his claim. The record before me indicates that the money was received as a grant from the State. A board of education may appropriate by resolution any grants from the State which are intended for general use as specified by the board (Education Law "1718[2]), and there is no indication that respondent's intended use of the funds violated any State requirement. In appeals to the Commissioner of Education, petitioners bear the burden of establishing a clear right to the relief requested (Appeal of Shabazz, 38 Ed Dept Rep 481, Decision No. 14,076; Appeal of Holzer, 37 id. 549, Decision No. 13,924), and petitioner has not sustained that burden. Thus, there is no basis in the record to disturb respondent’s transfer of these funds.

Petitioner also raises a vague claim that respondent has consistently overestimated expenses so it can secretly transfer funds to other uses without public knowledge, citing the $100,000 transfer and the $507,778.55 transfers approved on May 6, 1998. Although petitioner alleges that respondent on April 1, 1998 approved a movement between various accounts in the "newly adopted budget," the record indicates that the budget transfers approved on April 1, 1998 related solely to the 1997-98 budget, not the proposed 1998-99 budget. Other than his conclusory allegations, petitioner presents no evidence of intentional manipulation of funds in violation of the Education Law or intentional overestimation of expenses in the 1998-99 budget. Recognizing that budgets are prepared almost a year in advance, a transfer of funds is permissible if authorized by the Regulations of the Commissioner (8 NYCRR "170.2; Rodman v. Lofaso, 23 Misc 2d 337 [Sup Ct Nassau Co 1960], app dism 13 AD2d 974 [2d Dept 1961]; Appeal of Wozniak, 21 Ed Dept Rep 297, Decision No. 10,690). Furthermore, petitioner has not requested any specific relief with respect to the $507,778.55 of transferred funds. Accordingly, this claim is dismissed.

I have reviewed petitioner's remaining contentions, and find them unpersuasive.

Accordingly, upon my review of the record, I find that petitioner has presented no facts to justify disturbing the results of the May 19, 1998 budget vote, to invalidate the contract respondent executed with Ms. Gress in April 1998, or to require my examination of respondent's procedures for formulating proposed annual budgets.

THE APPEAL IS DISMISSED.

END OF FILE

---