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Decision No. 14,696

Appeal of RAINER LANGSTEDT from action of the Board of Education of the Spencer-Van Etten Central School District, C. Thomas Bailey, Superintendent, Carla Harriger, District Clerk, regarding a district meeting.

Decision No. 14,696

(March 12, 2002)

Sayles & Evans, attorneys for respondent, James F. Young, Esq., of counsel


MILLS, Commissioner.--Petitioner appeals from certain actions by the Board of Education of the Spencer-Van Etten Central School District ("respondent board"), Superintendent C. Thomas Bailey ("respondent Bailey") and Carla Harriger, the school district clerk ("respondent Harriger"), in connection with a referendum held on June 19, 2001 for an $18.5 million capital project. The appeal must be dismissed.

On June 19, 2001 respondent board held a district meeting to permit district voters to vote on a referendum authorizing the expenditure of $18.5 million for additions to and renovations of school district facilities. The referendum passed by four votes. Prior to the vote, respondent board mailed out certain materials providing voters information about the project, including its potential tax impact. Attached to the petition is a May 2001 newsletter and an undated flyer mailed to district residents setting forth the potential property tax impact per year.

Petitioner asserts that the tax impact information is erroneous and claims that the distribution of erroneous information constitutes impermissible electioneering, warranting nullification of the June 19, 2001 vote. Respondents contend that the materials distributed contained accurate, factual information and there is no basis on which to nullify the vote.

Before turning to the merits of the appeal, I will first address a procedural issue. Petitioner"s reply contains additional allegations not set forth in the petition. It also includes new exhibits which petitioner could have included with his petition. The purpose of a reply is to respond to new material or affirmative defenses set forth in an answer (8 NYCRR "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 Taylor, 39 Ed Dept Rep 712, Decision No. 14,357). Furthermore, petitioner may not add entirely new claims (Appeal of Goldin, 38 Ed Dept Rep 317, Decision No. 14,043). Most of the material submitted in the reply is meant to buttress allegations contained in the petition. Moreover, all of the exhibits attached to the reply were available to petitioner prior to filing his petition and should have been attached thereto. Thus, I will only consider the reply to the extent that it complies with the requirements of 8 NYCRR "275.14.

In an appeal before the Commissioner, petitioner has the burden of establishing the facts upon which he seeks relief (8 NYCRR "275.10; Appeal of Boiko, 40 Ed Dept Rep ___, Decision No. 14,513; Appeal of Taylor, 39 id. 368, Decision No. 14,261; Appeal of Trombley, 39 id. 115, Decision No. 14,189). To invalidate the results of a school district election, petitioner must establish that irregularities occurred that affected the outcome of the election (Matter of Boyes v. Allen, et al., 32 Ad2d 990, aff"d 26 NY2d 709; Appeal of Huber, 41 Ed Dept Rep ___, Decision No. 14,676; Appeal of Goldin, 40 id. ___, Decision No. 14,573; Appeal of Lawson, 38 id. 713, Decision No. 14,124), were so pervasive as to vitiate the electoral process (Appeal of Meyer, et al., 40 Ed Dept Rep 34, Decision No. 14,413; Appeal of Roberts, 33 id. 601, Decision No. 13,162; Matter of Gilbert, 20 id. 174, Decision No. 10,366), or demonstrate a clear and convincing picture of informality to the point of laxity in adherence to the Education Law (Matter of Levine, 24 Ed Dept Rep 172, Decision No. 11,356, aff"d sub nom Capobianco v. Ambach and Bd. of Ed., Glen Cove City School District, 112 AD2d 640). In this instance, I need not reach the question of whether an irregularity affected the outcome of the vote, as petitioner fails to prove that any irregularity, in fact, occurred.

The gravamen of petitioner"s claim concerns the accuracy of the information respondents provided district residents concerning the projected tax impact of the proposed capital project. The petition is somewhat unclear as to the exact nature of petitioner"s disagreement regarding the calculation of the projected tax impact. However, it appears that petitioner essentially challenges respondent board"s use of figures representing the net local share of the cost of the project (adjusted as discussed below), as opposed to using figures representing gross local share, calculated prior to adjustment. Petitioner asserts that the latter figure should have been used to calculate the tax impact. I note initially that there is no statute or regulation governing the specific method of calculating the overall tax impact of a capital project. Thus, the sole issue is whether respondent board"s use of figures representing the net local share of the project to calculate tax impact was reasonable. I find that it was.

The tax impact projections were prepared by the respondents" financial consultant, who calculated the net impact on the tax levy by determining the impact from the gross cost of the project and then adjusting that value for (1) interest earned for the interim period beginning when the borrowed funds are received, and ending when those funds are spent, and (2) the retirement of other long-term obligations of the district during the term of the obligation for the instant project.

The parties agree that the "gross local share" represents the local share of the total cost of the project. Petitioner essentially argues that respondent board is obliged to levy this unadjusted cost directly on the taxpayers of the district to meet the true cost of the project. However, failure to adjust the gross local share prior to levy by accounting for the factors noted above would unfairly and unnecessarily increase the burden of local taxpayers. With respect to the first factor, respondents point out that, while the financing of the project creates a debt of the district, it also provides the district with a reciprocal asset " "earned interest." While waiting to use the borrowed money, the district will earn interest on the borrowed sums. The earned interest, therefore, offsets at least part of the interest owed as a result of the borrowing. Therefore, respondents are not obliged to tax residents to pay that portion of the project"s cost.

With respect to the second factor, respondent board adjusted the gross local share by the amounts of other unrelated debt that will be retired during the life of the debt at issue herein. Upon retirement of each of the other debts, respondent board will no longer have to tax residents to pay those debts, and the tax levy would decrease accordingly. However, rather than decrease the projected tax levy to reflect retired debt, only to then increase the projected tax levy to reflect the proposed project"s debt, respondent board simply projected the resultant tax levy required to finance the district"s cumulative obligations.

Therefore, the projected tax impact of the new capital project is not simply based on the total cost of the project, as petitioner argues. Ultimately, respondent board requires an increased tax levy smaller than the local share of the gross cost of the project, and respondent board projected a tax impact that levies only that much. Moreover, respondent board"s calculation of the projected tax impact based upon the local share of the net cost of the capital project best forecasts information reasonably considered to be most important to the taxpayers " in the end, how much will taxpayers actually have to pay annually. While taxpayers will ultimately pay the full cost of the project, the impact on taxes will be less than the gross cost of the project because, as noted above, other circumstances impact on the calculation of the annual tax levy. The fact that petitioner disagrees with respondent board"s methodology, of itself, provides no basis for substituting my judgement for that of respondent board.

For the reasons set forth above, I find that the information disseminated by respondent board in connection with the June 19, 2001 vote was accurate and reasonable. Having determined that no irregularity occurred in connection with the vote, I need not address petitioner"s
other claims.




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