MILLS, Commissioner.--Petitioner challenges various actions of the Board of Education of the City School District of the City of Glen Cove ("respondent") regarding the budgets for the 1998-99 and 1999-2000 school years. The appeal is sustained in part.

Petitioner alleges that respondent violated Real Property Tax Law ("RPTL") "1318(1) by retaining an unexpended surplus from the 1998-99 budget that exceeded two percent of the 1999-2000 budget. He alleges that respondent also violated RPTL 1318(1) by failing to state the amount of the unexpended surplus on the tax warrant for 1999-2000 and failing to state that the surplus was applied in calculating the amount of the tax levy. Petitioner also asserts that respondent failed to list the amount of unexpended surplus to be retained and the amount to be used in support of appropriations in either the 1998-99 or the 1999-2000 budget and that neither budget included a comparison to the prior year’s data.

Petitioner further claims that respondent improperly used public funds to influence the outcome of the 1999-2000 budget vote by advertising that the proposed budget would result in a 1.9% tax increase when it knew the actual increase was likely to be larger. He also contends that respondent violated Education Law "305(26) by failing to publish notices stating where the proposed 1998-99 and 1999-2000 budgets, with attachments, would be available for public inspection. Finally, petitioner asserts that respondent violated Education Law "2528 by publishing notice in only one of the city’s two general circulation newspapers that the audited financial report for the 1998-99 fiscal year was available and by not publishing that notice until 21 days after the end of the third month following the close of the fiscal year.

Petitioner asks me to remove the members of respondent board because he claims that they have willfully violated the law and failed to exercise due diligence in carrying out their duties. He also asks me to return the 1998-99 surplus to the district taxpayers, void the 1999-2000 budget, establish a contingency budget and return any taxes in excess of the amount necessary to fund the contingency budget to the taxpayers.

Respondent denies that it violated RPTL "1318(1), willfully or otherwise. Respondent states that when its members signed the 1999-2000 tax warrant they believed the retained fund balance was within the 2 percent limit. Respondent also states that on or about August 20, 1999, auditors advised respondent that as of June 30, 1999, the unexpended surplus exceeded the 2 percent limit. Respondent states upon information and belief that the excess fund balance was used to make unbudgeted tax certiorari payments and contends that no violation occurred. Respondent argues that petitioner’s remaining claims are untimely and that petitioner has failed to prove that respondent violated the law. Respondent contends that the estimated tax rate included in its publications was based on the best information available at the time.

The appeal must be dismissed to the extent that it seeks the removal of individual board members. The individuals against whom petitioner seeks relief are clearly necessary parties, as their interests would be adversely affected if I were to decide in petitioner's favor (Appeal of Simons, 39 Ed Dept Rep __, Decision No. 14,367; Appeal of Looman, 39 id. 370, Decision No. 14,262; Appeal of Rider, 39 id. 282, Decision No. 14,238). To join an individual as a party to an appeal, that person must be named as a respondent, served with the petition and notice of petition, and afforded an opportunity to defend his or her interests (Appeal of Board of Education of the Ardsley UFSD, 38 Ed Dept Rep 221, Decision No. 14,019). Petitioner has not named any individual board members as respondents in either the petition or the notice of petition and has not personally served any of the board members. Moreover, the notice of petition does not state that the removal of any person is sought, as required by 8 NYCRR 277.1. Thus, to the extent petitioner seeks removal of individual board members, the appeal must be dismissed for failure to join necessary parties.

Pursuant to "275.16 of the Commissioner's Regulations, an appeal to the Commissioner of Education must be commenced within 30 days of the making of the decision or the performance of the act complained of. The petition in this appeal was served on respondent on February 2, 2000. Thus, petitioner’s claims that improper procedures were followed in connection with the 1998-99 budget, which concern actions taken in 1998, are untimely. His claims that respondent did not properly publish notices regarding the availability of the 1999-2000 budget and the audited financial report for 1998-99 similarly are untimely because he failed to bring this appeal within 30 days of the challenged actions.

With respect to appeals involving school district elections, I have held that it would be unreasonable and detrimental to the efficient resolution of a petitioner’s claims to require that petitioner institute separate appeals with respect to acts comprising a series of events closely related to an election, so as to meet the 30 day requirement set forth in "275.16. In such circumstances, even though the appeal involves acts occurring more than 30 days from the date the appeal was commenced, I have declined to dismiss the appeal as untimely provided that the appeal was commenced within 30 days of the election (Appeal of Schadtle and Wilcox, 38 Ed Dept Rep 599, Decision No. 14,102). Here, however, petitioner failed to appeal respondent’s alleged attempt to influence the budget vote by advertising an erroneously low estimate of the 1999-2000 tax increase until well beyond 30 days after the election, which took place on May 18, 1999. That claim, therefore, also must be dismissed.

An appeal alleging a violation of RPTL "1318(1) is timely if it is brought within the fiscal year during which unexpended surplus funds are improperly retained (Appeal of Schadtle, 40 Ed Dept Rep __, Decision No. 14,421; Appeal of Siver, 37 id. 498, Decision No. 13,912; Appeal of Astafan, 36 id. 463, Decision No. 13,776). This appeal was commenced on February 2, 2000, during the 1999-2000 school year, and therefore is timely with respect to allegations that surplus funds from 1998-99 were improperly retained by respondent in the 1999-2000 school year.

Under RPTL "1318(1), at the conclusion of each fiscal year, a board of education must apply any unexpended surplus funds to reduce its tax levy for the upcoming school year. Surplus funds are 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" (RPTL "1318[1]). Thus, at the end of each school year, all unexpended operating funds in excess of two percent of the amount of the budget for the upcoming school year must be applied to reduce the upcoming tax levy (Appeal of Schadtle, supra; Appeal of Clark, 37 Ed Dept Rep 386, Decision No. 13,885; Appeal of Moro, 35 id. 474, Decision No. 13,604).

Respondent states that when the July 1, 1999 tax warrant was prepared it believed the retained surplus fell within the 2 percent limit. However, it concedes that on August 20, 1999, its auditors advised it that unexpended surplus funds in excess of 2 percent of the budget had been retained. Respondent also asserts that the surplus was properly applied to cover unbudgeted tax certiorari payments. While RPTL "1318(1) permits a board of education to retain additional unexpended operating funds when authorized to do so "under other sections of law," it does not authorize a board to retain such funds by informally deciding to apply them to unbudgeted expenditures. The authority to exceed the two percent limit on retaining unexpended funds applies only to reserve funds specifically authorized by law (Appeal of Schadtle, supra; Appeal of Simons, supra; Appeal of Clark,supra). The record does not establish that a properly authorized reserve fund was created in this case.

Respondent also failed to comply with the requirement in "1318 that "[t]he warrant of the collecting officer...shall state the amount of unexpended surplus funds in the custody of the board and shall further state that except as authorized or required by law, such unexpended surplus funds have been applied in determining the amount of the school tax levy." This language did not appear in the warrant dated July 1, 1999.

THE APPEAL IS SUSTAINED TO THE EXTENT INDICATED.

IT IS ORDERED that respondent henceforth fully comply with Real Property Tax Law "1318 and approve tax warrants in strict compliance with the statutory requirements.

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