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Decision No. 14,898

Appeal of GEORGE R. HUBBARD from action of the Board of Education of the Greece Central School District and its Superintendent regarding a contingency budget.


Harris Beach LLP, attorneys for respondents, James A. Spitz, Jr., Esq., of counsel 

MILLS, Commissioner.--Petitioner challenges actions of the Board of Education of the Greece Central School District ("the board") and its Superintendent ("superintendent") relating to the adoption of a contingency budget for the 2002-2003 school year.  The appeal must be dismissed.

In March 2002, the superintendent presented a draft budget to the board in the amount of $154,361,699, which included $8,131,000 for debt service.

On April 9, 2002, upon recommendation of the superintendent, the board adopted a proposed budget for submission to the voters in the amount of $153,761,699, which was $600,000 less than the initial proposal.  The proposed April budget contained $800,000 less for debt service but added $200,000 for anticipated tax certiorari expenses.  The April budget also proposed liquidation of three capital reserve funds (equipment, buses, and repairs), which respondents estimated to be worth approximately $800,000, to provide for the lower debt service figure.  (I note that these reserve funds were the subject of a prior appeal, Appeal of Kackmeister, 40 Ed Dept Rep 577, Decision No. 14,560.)  The April budget contained non-contingent expenses in the amount of $3,050,211.

Following a budget hearing, the district mailed to voters a budget notice stating the proposed budget figure of $153,761,699, and estimating a projected contingency budget in the amount of $153,562,668 (Education Law "2022[2-a]).

On May 21, 2002, district voters defeated the proposed budget.  The board met on May 28, discussed the budget situation, and decided to meet again on June 4 to make a final decision on the budget.

On June 4, 2002, the board adopted a contingency budget in the amount of $152,686,488 for the 2002-2003 school year.  This figure was arrived at by subtracting $3,050,211 in non-contingent expenses from the defeated budget of $153,761,699, and adding in resultant increases of $1,975,000 in additional contingent expenses.  The additional expenses included $900,000 for debt service (because the proposed liquidation of reserve accounts to pay debt service had been defeated), $645,000 for repair expenses to buses, equipment and buildings which would have been unnecessary if new purchases had been made under the defeated budget, $80,000 for additional tax certiorari exposure, and $350,000 for the purchase of defibrillators.

The board also adopted three additional propositions to be submitted to the voters at a special district meeting on June 20, 2002, authorizing $500,000 for the purchase of new school buses, authorizing the liquidation of capital reserve funds for equipment, buses, and repairs in the amount of $900,000, and authorizing the use of revenue from a "pouring rights" contract for certain capital improvements.  The voters ultimately defeated these propositions on June 20.

This appeal was commenced July 1, 2002.  Petitioner seeks the following relief:

. . . that the Respondents disclose all general fund appropriations, such as in a line-item budget, in the future.

. . . that if the Contingent Budget for 2002-03 contains non-contingent expenditures, that the Commissioner order the Respondent [sic] to re-adopt the Contingent Budget properly.

. . . that Commissioner warn members of the Board of Education and the Superintendent, that if they persist in noncompliance of applicable laws, the commissioner [sic] will remove them from office.

Petitioner does not challenge the result of the district vote conducted May 21, 2002, in which the proposed budget was defeated.

The petition raises a number of issues, several of which deal with actions of the board prior to the district budget vote on May 21, 2002.  For example, petitioner claims that voters were not given information as to the exact balances in the reserve funds sought to be terminated, nor information as to exactly how those monies would be applied if liquidation were approved.  He complains that the voters were given no basis for determining whether the reserve funds were "no longer desirable," citing Education Law "3651(5).  He also claims that respondents made certain changes to proposed debt service expenditures so that the proposed budget increase would appear smaller than it actually was.  However, all of these actions occurred more than 30 days prior to the commencement of this appeal.

Petitioner has neither challenged the results of the election, nor commenced this appeal within 30 days of the May 21 budget vote.  As a result, the claims that pre-date the election of May 21, 2002, are untimely and must be dismissed (8 NYCRR "275.16; Appeal of Lambert, 37 Ed Dept Rep 599, Decision No. 13,937; Appeal of Pucci, 31 id. 3, Decision No. 12,546; Appeal of Scanio, 22 id. 315, Decision No. 10,974).

Petitioner has two principal objections with respect to the contingency budget adopted by the board on June 4, 2002.  First, he contends that the board "did not disclose a line-item budget to the Board or the public on or before [the] contingent budget was adopted wherein expenditures for non-contingent purposes could be identified."  He contends that respondents "failed to disclose in detail using a line-item budget whether all non-contingent expenses had been removed from the defeated budget."

With respect to the first objection, petitioner seems to suggest that the board was obligated in some way to provide information to the general public with respect to the adoption of a contingent budget along the same lines it is required to follow prior to a public vote on a budget.  However, petitioner cites no authority for this suggestion, and I am not aware of any such requirement.  The legal requirements of notice to the public prior to a public vote are intended to provide the electorate with information it needs to make an informed decision on a proposed budget.  However, once the electorate has defeated the budget, it becomes the responsibility of the board of education, if, as here, it chooses not to seek a second public vote, to prepare and adopt a contingency budget.  Once a board decides to adopt a contingency budget rather than schedule a second budget vote, the board"s obligations are defined by Education Law "2023, specifically to "adopt a contingency budget . . . and . . . levy a tax for the same, in like manner as if the same had been voted by the qualified voters . . ."  It is clear from the minutes of the June 4, 2002, board meeting that the contingency budget was adopted in a public session before approximately 40 members of the public by a 7-2 vote.  Petitioner has raised no challenge to the board"s authority to adopt a contingency budget.  I therefore find no basis for petitioner"s first objection.

With respect to petitioner"s second objection, petitioner does not define precisely what he means by a "line-item budget," a term that is neither defined nor used in the Education Law (cf., Education Law "1716[1]; 8 NYCRR "170.9).  Respondents have submitted affidavits to explain how the contingency budget was arrived at and ultimately adopted.  The affidavits and their accompanying exhibits show how the non-contingent items contained in the defeated budget were removed, and also explain the reasons that certain additions were made.

Petitioner has not challenged any particular item in the contingency budget, but asks me to order the board to re-adopt a new contingency budget if non-contingent items exist in the current budget.  However, it is well established that it is the board of education in the first instance which must make a determination as to whether any item is contingent or non-contingent (see, e.g., Appeal of Gorman, 39 Ed Dept Rep 377, Decision No. 14,265).  When that determination is challenged, it is petitioner who has the burden of proof as to a challenged item (8 NYCRR "275.10; Appeal of Clay, et al., 37 Ed Dept Rep 697, Decision No. 13,961; Appeal of Mitzner, 31 id. 142, Decision No. 12,598).  Here, petitioner has not proven that any item contained in the contingency budget is in fact improper, and I am therefore constrained to dismiss the appeal.

Although the appeal is dismissed, I must comment on the form of the budget adopted by the board.  I find that the methodology used here, i.e., taking the budget defeated by the voters and merely adding five summary sheets entitled "Summary of Appropriations (By Function)," "Summary of Appropriations (By Object)," "Three Part Budget," "Summary of Projected Revenues," and "Summary of Projected Tax Rates," does not produce an adequate contingency budget.  A contingency budget adopted under Education Law "2023 must have the same degree of specificity, by both function and object, that is required by Education Law "1716 for budgets that are presented to the voters, in order that district residents may have a full understanding of revenue and expenditures, and may be able to examine any expenses that might be non-contingent.  A budget which depends on summary sheets and requires a reader to use outside materials and to perform his own mathematical computations is insufficient (see, Education Law ""1716 and 1718; 8 NYCRR ""170.2 and 170.9; General Municipal Law "36).

The 2002-2003 contingency budget has now become moot, but I caution respondent that any future contingency budget must meet the standard of Education Law "1716.

To the extent that the petition seeks relief that the Commissioner of Education is not authorized to grant, it is dismissed.  I have considered the parties" other claims and find them without merit.