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Decision No. 15,155

Appeal of SCOTT POLMANTEER, on behalf of his son NICHOLAS POLMANTEER, HAROLD and CYNTHIA TITUS MANSFIELD, on behalf of their children JACQUELINE and FRANK MANSFIELD, CATHERINE BOVEE, on behalf of her son BRIAN WEGMAN, and ROXANNE MILLER, on behalf of her children ETHAN and JULIA PRATT, from action of the Board of Education of the Cato-Meridian Central School District, Robert Vogel, president, Margaret Meccariello, Donald Thompson, Deborah Kolb, Katherine Bratt, Joanne Lloyd and Herbert Thomas, trustees, regarding a contingency budget.

Decision No. 15,155

(December 24, 2004)

Andrew S. Fusco, Esq., attorney for petitioners

Matthew R. Fletcher, Esq., attorney for respondents

MILLS, Commissioner.--Petitioners challenge the 2004-2005 contingency budget adopted by the Board of Education of the Cato-Meridian Central School District ("respondent board"). The appeal must be dismissed.

On June 24, 2004, after district voters twice defeated a proposed budget, respondent board adopted a contingency budget as required by Education Law ��2022 and 2023. The contingency budget did not include appropriations for interschool athletics, extracurricular activities or field trips. On July 22, 2004, petitioners initiated this appeal on behalf of their children, and purportedly on behalf of a class of parents and students in the district, challenging the contingency budget. Thereafter, petitioners commenced a proceeding pursuant to Article 78 of the Civil Practice Law and Rules in New York State Supreme Court, Cayuga County, also challenging the contingency budget.

Petitioners object to the contingency budget on several grounds. They allege that respondents� failure to include appropriations for interschool athletics, extracurricular activities and field trips violates the requirements of Education Law �2023. Petitioners also allege that respondents exceeded the maximum cap on administrative expenditures imposed by Education Law �2023.

Petitioners further assert that, to avoid exceeding the cap, respondents improperly reallocated certain administrative expenditures to the program expenses portion of the budget. Petitioners also disagree with respondents� decision to allocate funds to reduce a pre-existing budget deficit. Finally, petitioners claim that respondents have employed unsound accounting methods and principles. Petitioners request an opportunity to present evidence at a hearing regarding their claims.

Respondents contend that petitioners lack standing to maintain the appeal, that class status must be denied and t hat petitioners failed to file a notice of claim. Respondents maintain that the contingency budget is in all respects proper.

Respondents claim that petitioners lack standing to maintain this appeal. Pursuant to Education Law �310, an individual may not maintain an appeal unless aggrieved in the sense that he or she has suffered personal damage or injury to his or her civil, personal or property rights. Only persons who are directly affected by the action being appealed have standing to bring an appeal (Appeal of Murphy, 39 Ed Dept Rep 562, Decision No. 14,311; Appeal of Lucente, 39 id. 244, Decision No. 14,227). A district resident has standing to challenge an allegedly illegal expenditure of district funds (Appeal of Patton, et al., 42 Ed Dept Rep 226, Decision No. 14,832; Appeal of Gargan, 40 id. 465, Decision No. 14,528; Appeal of Goldin, 38 id. 322, Decision No. 14,044). Petitioners, as residents of the district, challenge certain expenditures included in the contingency budget adopted by respondents. Petitioners also challenge, on behalf of their children, respondents� determination to eliminate interscholastic sports, extracurricular activities and field trips in which the students had previously participated. I find, therefore, that petitioners have standing to maintain this appeal (Appeal of Gargan, supra; Appeal of Murphy, supra).

Class certification, however, is denied. Petitioners purport to represent "the present parents and students of the Cato-Meridian Central School District, who are likewise harmed by the adoption by respondents of the 2004-2005 Cato-Meridian Central School District �contingency budget�." An appeal may only be maintained on behalf of a class where the class is so numerous that joinder of all members is impracticable and where all questions of fact and law are common to all members of the class (8 NYCRR �275.2; Appeal of Cartagena, 43 Ed Dept Rep 272, Decision No. 14,992; Appeal of Colety, 42 id. 162, Decision No. 14,806). A petitioner must set forth the number of indivi duals he or she seeks to represent and must show that all questions of law and fact would be common to all members of the class (Appeal of Cartagena, supra; Appeal of Colety, supra). Petitioners have failed to meet this requirement.

The Commissioner of Education will not entertain an appeal where it appears that the issue in controversy is simultaneously being litigated in another forum (Appeal of the Bd. of Educ. of the Town of Webb U.F.S.D., 40 Ed Dept Rep 449, Decision No. 14,524; Appeal of a Student with a Disability, 36 id. 287, Decision No. 13,726). The record indicates that petitioners commenced an action against respondents in Cayuga County, Supreme Court, raising similar claims regarding the funding of interschool athletics, extracurricular activities and field trips, and seeking similar relief. On August 23, 2004, the court rendered an order and decision in favor of petitioners, directing respondent board to fund such activities in its contingency budget. Respondents appealed this decision to the Appellate Division, Fourth Department. Since petitioners� claims regarding the funding of interschool athletics, extracurricular activities and field trips are pending in the courts, this appeal must be dismissed as to those claims (Appeal of the Bd. of Educ. of the Town of Webb U.F.S.D., supra; Appeal of a Student with a Disability, supra).

Petitioners� claims regarding the administrative expense cap, respondent board�s allocation of expenses to the program component of the contingency budget and its reduction of the deficit must be dismissed on the merits. In their pleadings, petitioners set forth a number of conclusory allegations regarding the contingency budget adopted by respondents. In an appeal to the Commissioner of Education, the petitioner has the burden of demonstrating a clear legal right to the relief requested and establishing the facts upon which he seeks relief (8 NYCRR �275.10; Appeal of Antoniadis, 44 Ed Dept Rep ___, Decision No. 15,106; Appeal of Coleman, et al., 42 id. 256, Decision No. 14,845; Application of Wilson, 41 id. 196, Decision No. 14,663). Petitioners fail to submit any affidavits, exhibits or other documentation in support of their claims. Instead, petitioners request an opportunity to present proof at an evidentiary hearing that the contingency budget violates Education Law �2023.

An appeal to the Commissioner under Education Law �310 is appellate in nature and does not provide for discovery or evidentiary hearings (Lilley v. Mills, 274 AD2d 644; Akshar v. Mills, 249 AD2d 786, lv denied 92 NY2d 962; Appeal of Coleman, supra). While oral argument may be granted at the discretion of the Commissioner, "[a]ll evidentiary material [must] be presented by affidavit or by exhibits. No testimony is taken and no transcript of oral argument [is] made" (8 NYCRR �276.2[d]). The burden is on petitioners to allege and prove facts upon which relief may be granted, not on respondents to rebut conclusory allegations set forth in the petition (Application of Wilson, supra).

On the record before me, petitioners fail to establish a basis for their factual claims on the administrative cap, allocation of expenses to the program component of the budget or the deficit reduction. Petitioners claim that respondents have exceeded the maximum cap on administrative expenses in a contingency budget imposed by Education Law �2023(3). A school district budget consists of an administrative component, a program component and a capital component (8 NYCRR �170.8). All parties agree that the administrative component of respondent board�s contingency budget must not exceed 12.19% of the total budget, exclusive of the capital component. Petitioners assert in conclusory fashion that, in fact, the administrative component of the contingency budget approved by respondents constitutes 12.57% of the total budget, exclusive of the capital component. Petitioners present no documentary evidence to support their claim.

Respondents assert that, although the administrative component of the June 24, 2004 contingency budget initially exceeded the statutory cap, at a July 21, 2004 meeting, they recalculated the administrative component. Respondents assert that the administrative portion of the contingency budget currently does not exceed the 12.19% maximum cap imposed by Education Law �2023(3). Respondents submit the minutes of the July 21, 2004 meeting in support of their assertion, while petitioners submit no contravening evidence.

Petitioners allege that, when they revised the administrative component of the contingency budget, respondents improperly reallocated certain expenses from the administrative component to the program component. In support of their contention, petitioners cite only one example, alleging that respondents improperly reallocated $18,064 in legal expenses for a "BOCES negotiator" to the program component from the administrative component. Respondents deny the allegation and assert that the allocation of legal costs from the administrative component to the program component of the contingency budget is permissible. Respondents state that the allocation of legal expenses to the program component represents costs for negotiations with teachers and other employees within the program component, student discipline hearings and impartial hearings for students with disabilities. Respondents claim the allocation of those costs to the program component is consistent with Commissioner�s regulations.

Section 170.8 of the Commissioner�s regulations sets forth the types of expenses included in each component of a school district budget. Section 170.8(c) describes the expenses to be included in the program component and includes, "legal services relating directly to other accounts and functions in the program component." Inclusion in the program component of legal expenses related to student discipline hearings and impartial due process hearings for students with disabiltites is permissible (New York State Education Department, School Business Management - Handbook Number 3, Revised February 1998). However, respondents may not include legal expenses associated with contract negotiations. Although petitioners contend that respondents included legal expenses for a "BOCES negotiator," they do not explain the nature of that position. Nor do they provide any evidence regarding the actual amount attributable to that position. Therefore, on the record before me, it is not possible to determine whether the expense has been improperly allocated or what effect, if any, the allocation would have on the statutory cap.

Finally, petitioners challenge respondents� determination to expend $250,000 to eliminate, over a three to five year period, an accumulated deficit of approximately $750,000. In challenging that expenditure, petitioners assert in a conclusory fashion that respondents� determination is unfair, inequitable and an unsound accounting practice. Petitioners argue that the funds more appropriately could have been used to pay for the eliminated activities they desire.

Respondents correctly maintain that boards of education are not permitted to engage in deficit spending and are required to adopt a balanced budget annually (Education Law �1718). Respondent board is required to eliminate its deficit as soon as possible. Petitioners incorrectly assert that the $250,000 could be included in the budget appropriations to support the eliminated programs. The $250,000 is not included in the annual budget appropriation on which respondents calculate the administrative and total spending caps imposed on contingency budgets pursuant to Education Law �2023(4). Even if respondents did not identify revenues to eliminate the accumulated deficit, they could not increase the annual budget appropriations to fund the eliminated activities petitioners desire without running afoul of the statutory annual budget appropriation spending caps. Petitioners� disagreement with respondents� plan to eliminate its deficit does not render respondents� action arbitrary or capricious or contrary to law.

In light of this disposition, I need not address the parties� remaining claims.

Although the appeal is dismissed for the above-stated reasons, I am compelled to comment on the funding of interschool athletics, extracurricular activities and field trips because of the statewide implications of this issue. For the reasons set forth below, I must respectfully disagree with the conclusion of the Supreme Court, Cayuga County.

Petitioners contend that Education Law �2023(1), as amended by Chapter 436 of the Laws of 1997, requires a board of education to include funding for these activities in a contingency budget. Historically, interscholastic athletics, field trips and extracurricular activities were non-contingent expenditures that could not be included in a contingency budget. If a board of education adopted a contingency budget, and wanted to offer such programs to students, it was required to submit a proposition and obtain voter approval to fund such programs or obtain donations in advance from an outside source (Appeal of Gallagher, 39 Ed Dept Rep 623, Decision No. 14,331; Appeals of Scarrone and Tierney , 35 id. 443, Decision No. 13,594; Appeal of Farrell, 30 id. 81, Decision No. 12,397).

In 1997, extensive changes were made to the Education Law by Chapter 436 of the Laws of 1997 relating to the impact of a budget defeat and the adoption of a contingency budget. One major change was that school boards were prohibited from submitting to district voters a school district budget or a proposition for the expenditure of money more than twice (Education Law �2022[4] and [5]). Adoption of a contingency budget became mandatory after a second budget defeat (Id.). Another major change was that expenses incurred for interscholastic athletics, field trips and other extracurricular activities were made ordinary contingent expenses (Education Law �2023[1]). As such, voter approval was no longer required for a school district on a contingency budget to offer such programs to students.

Education Law �2023(1), thus currently provides:

If the qualified voters shall neglect or refuse to vote the sum estimated necessary for teachers� salaries, after applying thereto the public school moneys, and other moneys received or to be received for that purpose, or if they shall neglect or refuse to vote the sum estimated necessary for ordinary contingent expenses, including the purchase of library books and other instructional materials associated with a library and expenses incurred for interschool athletics, field trips and other extracurricular activities and the expenses for cafeteria or restaurant services, the sole trustee, board of trustees, or board of education shall adopt a contingency budget including such expenses and shall levy a tax for the same, in like manner as if the same had been voted by the qualified voters, subject to the limitations contained in subdivisions three and four of this section. (Emphasis added)

Petitioners point out that Chapter 436 of the Laws of 1997 added the phrase "shall levy" in place of "may levy" and contend that this amendment indicates the Legislature�s intent to mandate the inclusion of the enumerated items of expenses and activities in a contingency budget. However, this amendment must be interpreted in the context of the sweeping changes made by Chapter 436 of the Laws of 1997, including the addition of the phrase "shall adopt a contingency budget." When considered in this context, the change in language from "may levy" to "shall levy" is explicable as a consequence of making the adoption of a contingency budget mandatory after a second budget vote.

Moreover, Education Law ��1709 and 1804 confer specific powers and duties on the board of education of a central school district, including the power to prescribe the course of study by which the pupils of the schools shall be graded and classified, to prescribe the textbooks to be used in the schools, to make provision for the instruction of pupils in all subjects in which instruction is required to be given pursuant to Education Law and to have in all respects the superintendence, management and control of the schools. While Education Law �2023(1) requires a board of education to adopt a contingency budget, it does not abrogate the discretion of a board of education to determine whether to include or exclude specific items of expense or activities in the district�s educational program. Boards of education have always had discretion to determine ordinary contingent expenses, i ncluding whether to purchase library books or instructional materials or to participate on interschool athletics or conduct field trips. (See, New York State Education Department, School Business Management � Handbook Number 3, Revised February 1998, Appendix F, page 58.)

Although the legislative history of Chapter 436 of the Laws of 1997 provides minimal guidance regarding the intent of the amendment to Education Law �2023(1), the sponsor�s memorandum to a subsequent similar amendment is illustrative and does not support petitioners� contention. Chapter 682 of the Laws of 2002 also amended Education Law �2023(1) to include as ordinary contingency expenses, expenses for cafeteria or restaurant services. The sponsor�s memorandum states that the purpose of the legislation is to "allow school districts the ability to continue to provide cafeteria services, as part of ordinary contingent expenses" (emphasis added). In the "Summary of Provisions" section of the memorandum, the sponsor states:

This legislation allows school districts, including Union Free and Common school districts, the ability to include expenses for cafeteria or restaurant services, as ordinary contingency expenses for which the sole trustee, board of trustees or board of education may levy a tax (emphasis added).

Thus, in the 2002 amendment to Education Law �2023(1), the Legislature clearly articulated an intent to continue to vest the board of education with discretion to include certain expenses as part of a contingency budget.

In sum, I find no indication in the language or legislative history of Education Law �2023(1) of an intent to compel boards of education to expend funds for programs or activities they have not approved. Accordingly, a board� s decision not to fund interscholastic sports, extracurricular activities and field trips, would appear to be within its authority and discretion (See, Appeal of Baisch, 40 Ed Dept Rep 405, Decision No. 14,512.)

THE APPEAL IS DISMISSED.

END OF FILE