* Subsequent History: Matter of Board of Educ. of Campbell-Savona Cent. School Dist. v Mills; Supreme Court, Albany County; Judgment dismissed petition to review; May 8, 2006. *

Appeal of PATRICIA J. WOLVERTON from action of the Bradford Central School District and the Campbell-Savona Central School District regarding a school district reorganization vote.

Decision No. 15,484

(November 9, 2006)

Hogan, Sarzynski, Lynch, Surowka & DeWind, LLP, attorneys for the Bradford Central School District, John Hogan, Esq., of counsel

Harris Beach, PLLC, attorneys for the Campbell-Savona Central School District, Robert H. Plaskov and Peter J. Spinelli, Esqs., of counsel

MILLS, Commissioner.--Petitioner challenges a vote held on November 17, 2005 which authorized the reorganization of the Bradford Central School District (hereinafter “Bradford”) and the Campbell-Savona Central School District (hereinafter “Campbell-Savona”) into a single central school district.  The appeal must be sustained.

In the fall of 2004, Bradford and Campbell-Savona (collectively referred to as “respondents”) began considering the possibility of consolidating the two school districts by annexing Bradford to Campbell-Savona.  An economic feasibility study was conducted and a report presented to both districts in November 2004.  The report included financial information on both districts and projected financial data for the proposed combined district.  In January and February 2005, the Bradford and Campbell-Savona boards respectively approved resolutions to go forward with an annexation study.

In April 2005, the boards jointly established a committee to conduct an annexation feasibility study (the “study”).  At an April 20, 2005 committee meeting, a financial overview of each district was presented.  Budget information for both districts was analyzed during the study.  The study was completed in June 2005 and on July 13, 2005, the final report of the study, including financial data, was presented to Campbell-Savona residents.  Community members had an opportunity to ask questions of the study consultants, committee members and the superintendent regarding the study process and findings.  On July 14, 2005, a similar meeting was held for Bradford residents.  Financial data at the time indicated that Campbell-Savona’s budget was balanced for the 2004-2005 and 2005-2006 school years. 

The districts also distributed newsletters setting forth the findings of the study and discussing the benefits of consolidation, including financial advantages, reduced taxes and enhanced academic programming and extracurricular opportunities.

On October 13, 2005, each district conducted a straw vote to gauge resident support for the annexation of Bradford to Campbell-Savona.  In each district, voters supported the annexation.

Pursuant to Article 37 of the Education Law, on October 18, 2005, I issued an order, effective July 1, 2006, dissolving Bradford and annexing its territory to Campbell-Savona.  The order became final within 60 days or, if a permissive referendum was requested, upon approval of the qualified voters of the districts.  Upon receipt of a petition for a referendum, pursuant to Education Law §1802(2), a vote was held on November 17, 2005 at which the October 18, 2005 annexation order was approved.  The vote in Bradford was 438 in favor to 352 opposed and, in Campbell-Savona, 606 in favor to 406 opposed.

On January 31, 2006, Campbell-Savona apparently learned that it had a shortfall in its 2005-2006 budget, initially thought to be approximately $300,000.  By March 2006, Campbell-Savona had determined that the actual amount of the deficit for 2005-2006 was approximately $940,000. 

On March 9, 2006, Campbell-Savona issued a statement to its faculty and staff apprising them of the deficit.  It notified them of a cash flow problem and indicated that the district would have to borrow funds to pay its bills in the current school year.  Staff was notified not to expect additional programs, extracurricular activities or sports teams.  On March 10, 2006, Campbell-Savona mailed a newsletter to residents of both districts informing them that Campbell-Savona had a $935,700 shortfall for the 2005-2006 school year.

In addition, Campbell-Savona’s independent auditor issued a revised management letter and letter of communication setting forth the results of an independent audit of the district’s 2004-2005 financial statements.  The report indicated that, as of June 30, 2005:

• the General Fund undesignated fund balance was a deficit of ($960,209);
• the School Lunch Fund undesignated fund balance was a deficit of ($94,464);
• expenditures incurred for 2004-2005 bus purchases exceeded the voter authorized amount of $273,000 by $18,858; and
• the District overestimated revenue projections by $507,076.  In addition, the District expenditures exceeded budgetary appropriations by $77,373 for the General Fund during the 2004-2005 year, in violation of Education Law §2522. 

The revised management letter and letter of communication submitted by petitioner are dated October 13, 2005, but the cover page indicates they were reissued and received March 17, 2006.  It is unclear when the report was actually received by the Campbell-Savona board and/or administration.

On April 4, 2006, petitioner, a resident of Bradford, commenced this appeal, challenging Bradford’s November 17, 2005 annexation vote and asking that it be annulled.  Petitioner also requested an interim order to stay the results of the November 17, 2005 vote and the annexation process.  The Bradford board supported petitioner’s stay request.  On April 21, 2006, petitioner’s request for interim relief was granted.

Petitioner challenges the validity of the results of the November 17, 2005 annexation vote in Bradford.  She contends that voters relied on information presented prior to the vote indicating Campbell-Savona’s favorable financial position.  She claims that, had Bradford voters known of the more than $900,000 deficit for 2005-2006, they would not have approved the annexation.  Petitioner submits affidavits from Bradford voters in support of her claim.

Bradford asserts that it reviewed all information from Campbell-Savona and timely shared all such information relating to Campbell-Savona’s financial condition with Bradford residents.  Bradford maintains that it was first informed on March 10, 2006 regarding Campbell-Savona’s actual financial situation.  In its answer, Bradford asserts that eight of the affidavits submitted by petitioner were executed by individuals whose names did not appear on its November 17, 2005 poll list.

Campbell-Savona contends that I lack jurisdiction to entertain the appeal.  It also maintains that the appeal is untimely, is moot and petitioner lacks standing.  Campbell-Savona also asserts the appeal must be dismissed for failure to join necessary parties.  On the merits, Campbell-Savona maintains that petitioner has failed to establish a basis to nullify Bradford’s November 17, 2005 annexation vote. 

As a preliminary matter, I note that petitioner’s verified reply to the answer submitted by Campbell-Savona contains material outside the scope of a reply.  The purpose of a reply is to respond to new material or affirmative defenses set forth in an answer (8 NYCRR §§275.3 and 275.14).  A reply is not meant to buttress allegations in the petition or to belatedly add assertions that should have been in the petition (Appeal of Schildhorn, 44 Ed Dept Rep 212, Decision No. 15,152; Appeal of Kirschenbaum, 43 id. 366, Decision No. 15,020; Appeal of Hollister, 39 id. 109, Decision No. 14,188).  Therefore, while I have reviewed the reply, I have not considered those portions containing new allegations or exhibits that are not responsive to new material or affirmative defenses set forth in the answer.

Campbell-Savona contends that the appeal is jurisdictionally defective on two grounds.  The district asserts that Education Law §310 authorizes an appeal from any “action of a school district or a board of education” and maintains that the budget shortfall was “not an official act or decision of any officer, school authorities, or meeting of the school district.”  Alternatively, Campbell-Savona contends that petitioner is actually challenging my annexation order and asserts that such a challenge may only be maintained in a proceeding brought in New York State Supreme Court in a proceeding pursuant to Article 78 of the Civil Practice Law and Rules.

Petitioner challenges the validity of the special district meeting held in Bradford on November 17, 2005 at which district residents voted on whether to approve the October 18, 2005 annexation order.  Education Law §310(1) authorizes appeals made in consequence of any action “[b]y any school district meeting.”  Moreover, Education Law §2037 provides, “[a]ll disputes concerning the validity of any district meeting or election ... shall be referred to the commissioner of education for determination....” A special meeting of district voters for the purpose of voting on whether to approve a Commissioner’s annexation order is a district meeting within the meaning of Education Law §2037 (Matter of Markert v. Wilson, 284 App Div 1086; Finley, et al. v. Spaulding, et al., 274 App Div 522).  Petitioner’s challenge to the November 17, 2005 annexation vote, therefore, falls within my exclusive jurisdiction and the appeal is properly before me (Bd. of Educ. of the Campbell-Savona Cent. School Dist., et al., Sup Ct, Albany County, May 8, 2006, McNamara, J., Index No. 2846-06).

Campbell-Savona also alleges that petitioner lacks standing to maintain the appeal.  I disagree.  Petitioner’s status as a resident of Bradford gives her standing to challenge Bradford’s annexation referendum (Appeal of Wayne, 39 Ed Dept Rep 518, Decision No. 14,298).

Campbell-Savona asserts that, although petitioner named both school districts as respondents, she failed to also name the board of education in each district.  The district argues that the boards are necessary parties, contending that any ruling will affect the boards’ authority. 

Petitioner named both districts as respondents and properly served each district clerk, as required by §275.8(a) of the Commissioner’s regulations.  That section provides, in pertinent part:

[i]f a school district is named as a party respondent, service upon such school district shall be made personally by delivering a copy of the petition to the district clerk....(emphasis supplied)

Education Law §1804(1), relating to central school districts, provides, “[e]ach such central school district shall be managed by a board of education....”  Boards of education are charged with the “superintendence, management and control of the educational affairs of the district....” (Education Law §§1709[33], 1804[1]).  Petitioner has properly named and served both school districts as respondents, and the respective boards received noticed thereof, as required by §275.8(a) of the Commissioner’s regulations.  Any order or judgment rendered as against the districts must necessarily be carried out by their managing boards of education.  The boards, therefore, need not be separately joined. 

Campbell-Savona also contends the appeal is untimely.  An appeal to the Commissioner must be commenced within 30 days from 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 O’Brien, 44 Ed Dept Rep 43, Decision No. 15,092; Appeal of Spina, 43 id. 354, Decision No. 15,016).  Petitioner bases her challenge to Bradford’s November 17, 2005 annexation vote on information that was not made known to district residents until the March 10, 2006 newsletter mailing.  Petitioner commenced this appeal on April 4, 2006, within 30 days of the mailing.  I, therefore, find the appeal to be timely. 

Campbell-Savona further maintains the appeal is moot.  The Commissioner will only decide 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 B.K. and R.K., 44 Ed Dept Rep 195, Decision No. 15,146; Appeal of V.L., 44 id. 160, Decision No. 15,132; Appeal of Garvin, 44 id. 30, Decision No. 15,087).  Campbell-Savona asserts that, upon voter approval on November 17, 2005, my October 18, 2005 annexation order became final and, thus, no further case or controversy exists.  However, the gravamen of petitioner’s appeal is a challenge to the validity of Bradford’s November 17, 2005 annexation vote.  Campbell-Savona’s contention that the results of the very vote that is the subject of the appeal renders the appeal moot is specious, at best.

To successfully challenge a referendum, a petitioner must establish that an irregularity occurred, and that the irregularity affected the outcome of the vote (Matter of Boyes, et al. v. Allen, et al., 32 AD2d 990, affd 26 NY2d 709; Appeal of Wayne, 39 Ed Dept Rep 518, Decision No. 14,298; Application to Reopen the Appeal of Hable, 30 id. 328, Decision No. 12,484), was so pervasive that it vitiated the electoral process (Appeal of Laurie, 42 Ed Dept Rep 313, Decision No. 14,867; Appeal of Meyer and Mittelstaedt, 40 id. 34, Decision No. 14,413), or demonstrates a clear and convincing picture of informality to the point of laxity in adherence to the Education Law (Appeal of Huber, et al., 41 Ed Dept Rep 240, Decision No. 14,676; Matter of Levine, 24 id. 172, Decision No. 11,356, affd sub nom, Matter of Capobianco v. Ambach, et al., 112 AD2d 640).  Moreover, where clear and convincing evidence of important character is presented, setting aside a referendum to reorganize a school district is warranted (see Matter of the Organization of Cent. School Dist. No. 1, 57 St Dept Rep 401).

When Bradford residents voted to approve dissolution of Bradford and its annexation to Campbell-Savona, they did so based upon information presented to them which indicated Campbell-Savona’s favorable financial position.  The financial and programmatic benefits of reorganization with Campbell-Savona had been explained to the voters, premised upon that district’s perceived favorable financial position.  Indeed, substantial time and effort was expended to provide Bradford residents with fiscal and programmatic information relating to the merger prior to the referendum; yet only four months after the vote at which Bradford voters approved annexation, they were first informed that Campbell-Savona had a current budget shortfall of nearly one million dollars and significant fund balance deficits from the 2004-2005 school year.  Thus, Bradford residents had no opportunity to address the existence of the substantial shortfall or its impact, if any, upon their taxes, educational or extra curricular programming subsequent to reorganization.  Given the significance of a decision to dissolve one’s school district and annex it to another, providing residents accurate information and an opportunity to address significant fiscal issues prior to voting on annexation is essential.  Deprivation of such information and opportunity constitutes an irregularity (see Application to Reopen the Appeal of Hable, 30 Ed Dept Rep 328, Decision No. 12,484).

Petitioner submits 54 valid affidavits from Bradford residents who voted at the November 17, 2005 referendum.  Each affiant states that, on November 17, 2005, he or she voted in favor of the annexation but would have voted against it had the affiant known of Campbell-Savona’s $935,700 shortfall.  Since the November 17, 2005 referendum succeeded in Bradford by an 86 vote margin, and petitioner has submitted 54 affidavits from Bradford voters who now state they would have voted otherwise, petitioner has met her burden of demonstrating that the result of the referendum was affected by the irregularity.  Since the record demonstrates that the results of the November 17, 2005 annexation vote would have been different but for the inaccurate financial information presented to Bradford voters, I conclude that the results of Bradford’s November 17, 2005 annexation vote must be set aside.      

THE APPEAL IS SUSTAINED.

IT IS ORDERED that the action of the voters of the Bradford Central School District at a special meeting held on November 17, 2005 approving a proposition annexing the district to the Campbell-Savona Central School District is set aside and annulled, without prejudice, however, to the filing of further petitions, pursuant to Education Law §1803(8), to call another special meeting to vote upon such question.

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