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Decision No. 15,204

Appeal of GEORGE R. HUBBARD from action of the Board of Education of the Greece Central School District regarding financial practices.

Decision No. 15,204

(April 6, 2005)

Harris Beach, LLP, attorneys for respondent, James A. Spitz, Jr. and Laura M. Purcell, Esqs., of counsel

MILLS, Commissioner.--Petitioner challenges certain actions of the Board of Education of the Greece Central School District ("respondent") with respect to the adoption and filing of the 2004-2005 real property tax report card and the liquidation of certain capital reserve funds. The appeal must be dismissed.

On April 6, 2004, respondent adopted its 2004-2005 budget resolution (the "budget resolution"). The budget resolution authorized the liquidation of three capital reserve funds (equipment, buses and repairs) (collectively "reserve funds") and the application of the proceeds to the bond indebtedness related to the original purpose of each fund. The budget resolution did not contain a provision whereby the board adopted the district's real property tax report card ("report card"). The district submitted its report card to the New York State Education Department ("SED") on April 7, 2004. This appeal ensued.

Subsequently, on May 11, 2004 respondent passed a resolution specifically adopting the report card. On May 18, 2004, voters approved the district's 2004-2005 budget and the liquidation of the reserve funds.

Petitioner alleges, interalia, that respondent did not adopt it's 2004-2005 report card and that the report card filed with SED was therefore improper. Petitioner further alleges that the report card publicly distributed with respondent's budget document did not show the date it was filed with SED as required by law and is therefore not an "authentic copy."

Petitioner also alleges that respondent has taken steps to liquidate the reserve funds which are "improper and deny voters clear choices." Specifically, he alleges that respondent has not established that the funds will be applied in a manner consistent with the budget proposition and as permitted by the Education Law. Petitioner contends respondent is improperly applying the proceeds of the reserve funds to the General Fund which will become part of the fund balance used to reduce the 2004-2005 tax levy. Petitioner also alleges that respondent is liquidating the reserve funds prior to ascertaining whether the voters have determined that they are "no longer desirable" as required by Education Law �3651(5). Finally, petitioner contends that respondent improperly used a single proposition to authorize the 2004-2005 budget and the liquidation of the reserve funds.

Petitioner requests that I direct respondent to properly adopt its 2004-2005 report card and properly adopt and file real property tax report cards in the future. Petitioner further requests that I nullify the voters' authorization to liquidate the reserve funds and that I instruct respondent to liquidate any capital reserve funds only after the voters have determined that the original purpose of the funds is "no longer desirable." Finally, petitioner requests that I instruct respondent to cease using single propositions to authorize unrelated purposes.

Respondent argues that it adopted a property tax report card on April 6, 2004 "through the adoption of the proposed budget" and that its subsequent resolution renders plaintiff's allegations related to the adoption and filing of the report card moot. Respondent denies that the report card omitted any required information. Respondent claims that petitioner's allegations regarding the budget proposition must be dismissed as untimely. Respondent further contends that petitioner's allegations related to the liquidation of the reserve funds must be dismissed as premature. Finally, respondent claims that petitioner's allegations regarding the ambiguity of the budget resolution and the inability of respondent to ascertain the voters' intent fail to state a claim upon which relief may be granted.

I must first address a procedural matter. Petitioner submitted proposed minutes of respondent's June 8, 2004 board meeting to support arguments made in his timely reply. Respondent has not objected to this submission. Pursuant to �276.5 of the Commissioner's regulations, I will accept this document for consideration.

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 unless any delay is excused by the Commissioner for good cause shown (8 NYCRR �275.16; Appeal of J.J., 44 Ed Dept Rep 113, Decision No. 15,115). Respondent contends that petitioner's claims regarding the budget proposition must be dismissed as untimely because it was adopted on April 6, 2004 and this appeal was commenced on May 7, 2004. I disagree. The budget proposition was not voted on until May 18, 2004 and, to the extent that petitioner's claims arise out of the proposition authorized by the voters on that date, petitioner's challenge is timely.

I find petitioner's claim that respondent did not adopt a property tax report card to be moot. The Commissioner of Education will only consider matters in actual controversy and will not render a decision on a state of facts which no longer exist or which subsequent events have laid to rest (Appeal of Johnson, 41 Ed Dept Rep 407, Decision No. 14,727; Appeal of Martin, 31 id. 441, Decision No. 12,692). The record reflects that on May 11, 2004, respondent passed a resolution specifically approving the report card. Because respondent has already taken the action requested by petitioner, this aspect of petitioner's appeal is moot. Nevertheless, I note that Education Law �1716(7)(b) requires board approval of a real property tax report card prior to it being forwarded to SED. Accordingly, respondent is reminded of the need to fully comply with all aspects of �1716 in the future.

Education Law �1716 and �170.11(8)(c) of the Commissioner's regulations govern the content of the property tax report card. The school property tax report card must include a report of:

  1. total spending;

  2. percentage increase or decrease in total spending;

  3. total estimated school tax levy;

  4. percentage increase or decrease in total school tax levy;

  5. projected enrollment growth;

  6. percentage change in enrollment; and

  7. percentage increase in the consumer price index.

(Education Law �1716[7][a], 8 NYCRR �170.11[8][c])

To the extent that petitioner alleges that the copy of the report card that was distributed with the budget was improper and not an "authentic copy" because it did not state the date on which it was submitted to SED, petitioner fails to carry his burden of proof. In an appeal to the Commissioner, the petitioner has the burden of demonstrating a clear right to the relief requested and the burden of establishing the facts upon which it seeks relief (8 NYCRR �275.10; Appeal of Sloley-Raymond, 44 Ed Dept Rep 27, Decision No. 15,085; Appeal of Nelson, 44 id. 20, Decision No. 15,082). I find that respondent's report card contains all required information and complies with the requirements of the Education Law and Commissioner's regulations.

Petitioner's claims regarding the liquidation of the reserve funds must be dismissed as premature. It is well settled that the Commissioner will not render advisory opinions or decide issues that have not yet become justiciable (Appeal of L.M., 43 Ed Dept Rep 279, Decision No. 14,994). The record reveals that the reserve funds have not yet been liquidated and, therefore, it is premature and speculative to conclude that they will not be liquidated in accordance with the Education Law or budget proposition.

Moreover, in an appeal to the Commissioner, the petitioner has the burden of demonstrating a clear right to the relief requested and the burden of establishing the facts upon which it seeks relief (8 NYCRR 275.10; Appeal ofSloley-Raymond, supra; Appeal of Nelson, supra). Petitioner repeatedly asserts that respondent has failed to show that it has acted properly with respect to the liquidation of the reserve funds. However, it is petitioner's burden to establish that respondent acted in contravention of the law or the budget proposition. Petitioner has failed to meet his burden. Petitioner argues that respondent's proposed budget does not identify bond debt relating to the original purposes of each reserve fund and, therefore, voters have no assurance that the proceeds of the liquidated reserve funds will be applied in a manner consistent with the Education Law or the budget proposition. However, according to respondent's Assistant Superintendent for Finance and Support Services, outstanding bond indebtedness for capital building improvements and repairs as well as purchases of new instructional equipment exceeds the amounts remaining in the reserve funds for repairs and equipment. In addition, in March 2004 voters approved a bond proposition for the purchase of buses, the amount of which far exceeds the amount remaining in the bus reserve fund. Finally, respondent has indicated that it will apply the liquidated proceeds to actual outstanding bonded indebtedness associated with repairs, equipment and buses.

Petitioner also alleges that the "Determination of 2004-2005 Estimated Tax Levy And Rate" contained in respondent's proposed budget shows that the fund balance used for the 2004-2005 tax levy includes proceeds of $1.2 million from the liquidation of the reserve funds. In response, the Assistant Superintendent avers that for bookkeeping purposes, the reserve funds are first liquidated into the fund balance and then transferred to debt service to be applied to the district's outstanding bond indebtedness. The corresponding expenditure is included in the "Debt Service Fund" line item of respondent's proposed budget. Respondent believes that this is the best presentation of the relevant information and has agreed to maintain detailed records of the transaction evidencing the liquidation of the reserve funds. Accordingly, petitioner has failed to put forth facts sufficient to support his allegation that respondent has improperly taken steps to liquidate the reserve funds.

Petitioner's allegation, that respondent is liquidating the reserve funds prior to ascertaining whether the voters have determined that they are "no longer desirable" as required by �3651(5) of the Education Law, is also without merit.

Education Law �3651(5) provides, in pertinent part:

Whenever the voters shall determine that the original purpose for which a reserve fund has been established is no longer desirable, the school authorities may liquidate the fund by first applying its proceeds to any outstanding bonded indebtedness and applying the balance, if any, to the annual tax levy . . . .

Petitioner argues it is implausible that voters determined that the reserve funds were " no longer desirable" because the proposed budget contains appropriations for building repairs and the purchase of equ ipment and there could be appropriations for similar purposes in the future. Respondent argues that, taken to its logical conclusion, petitioner's analysis would mean that a reserve fund can never be liquidated. Respondent argues that voters made an informed decision based upon information presented in meetings and materials and that they manifested their purpose by voting for the proposition. Petitioner offers no proof that such a determination was not made. Therefore, despite the fact that the budget proposition did not contain specific language that the reserve funds were "no longer desirable," I find that such a determination was implicit in the voters approval of the proposition.

Petitioner's contention that the budget proposition was improper because it did not state separately the proposed budget and liquidation of the reserve funds is without merit. A board of education has broad discretion in determining the form of its propositions and the power rests with the voters to reject propositions not satisfactory to the majority (Corbett v. Union Free School Dist. No. 21, Town of Hempstead, (199 Misc. 930, aff'd 278 AD 960; Appeal of Friedman, et al., 36 Ed Dept Rep 431, Decision No. 13,769).

In light of this disposition, I need not address the parties' remaining contentions.

THE APPEAL IS DISMISSED.

END OF FILE