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Decision No. 15,541

Appeal of DIANE CIRILLO from action of the Board of Education of the Seaford Union Free School District regarding financial practices.

Decision No. 15,541

(February 27, 2007)

Ingerman Smith, LLP, attorneys for respondent, Christopher Venator, Esq., of counsel

MILLS, Commissioner.--Petitioner challenges certain financial practices of the Board of Education of the Seaford Union Free School District (“respondent”).  The appeal must be dismissed.

In May 2004, district voters defeated respondent’s proposed 2004-2005 school budget.  Thereafter, respondent revised the proposed budget, reducing it by approximately $1.6 million.  Items cut from the budget included a fourth grade teacher position and an athletic trainer.  In preparing both proposed budgets, respondent included estimated State aid revenue of $7,520,000, as the State budget was not yet enacted.  On June 15, 2004, voters approved the revised 2004-2005 school budget of $42,211,493.

On August 9, 2004, the State budget was enacted.  As a result, the district received $7,869,470 in State aid - $349,470 more than respondent estimated in the approved 2004-2005 school budget.  On August 11, 2004, the Nassau County Board of Assessors notified school districts that, due to the delay in the State budget, the time in which districts could submit their budget – or revise a submitted budget – was extended to August 20, 2004 to permit districts to consider any additional State aid when determining the 2004-2005 tax levy.  On August 12, 2004, respondent approved the tax warrant for 2004-2005 based on revenue set forth in the school budget approved by voters on June 15, 2004, including the earlier State aid estimate of $7,520,000.

At a meeting held on August 31, 2004, respondent approved a resolution to increase the 2004-2005 approved school budget by adding $70,000 from the additional State aid revenue and restoring the previously cut fourth grade teacher position and athletic trainer.  On September 23, 2004, respondent published a financial statement pursuant to Education Law §1721.

On June 27, 2005, three days prior to the end of the 2004-2005 school fiscal year, petitioner initiated this appeal.  Petitioner claims that respondent failed to use the best estimate of State aid available when it approved the 2004-2005 tax warrant and thereafter failed to modify the 2004-2005 tax levy to reflect the increase in State aid provided in the enacted State budget.  Petitioner asserts that respondent improperly used some of the additional State aid revenue to restore certain expenditures to the 2004-2005 budget previously approved by the voters.  Petitioner also asserts that respondent failed to timely publish the district’s financial statement in accordance with Education Law §1721 and contends that respondent violated Real Property Tax Law (“RPTL”) §1318(1).  Petitioner maintains that respondent has engaged in similar improper practices for the past five school years.

Respondent asserts that, except for claims raised under RPTL §1318 for the 2004-2005 school year, the appeal is untimely.  Respondent maintains that its financial practices are in all respects proper.  With respect to petitioner’s claims under Education Law §1721, respondent contends that it has complied with the requirements of that statute and intends to timely comply in the future.

The appeal must be dismissed as 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 C.A., Sr., 45 Ed Dept Rep 388, Decision No. 15,360; Appeal of the New York Charter Schools Assn., Inc., et al., 45 id. 376, Decision No. 15,355; Appeal of the Bd. of Trustees of the N. Merrick Public Library, et al., 45 id. 363, Decision No. 15,350).  Petitioner’s appeal concerns several of respondent’s financial practices in relation to the 2004-2005 fiscal year.  As that fiscal year ended three days after petitioner commenced her appeal and any challenged expenditures relating to the 2004-2005 budget have been made, no meaningful relief can be granted and the appeal must be dismissed as moot.

Although the appeal is dismissed, I note that respondent admitted retaining unexpended operating funds in excess of the two percent limit under RPTL §1318.  Respondent is reminded of the need to fully comply with the requirements of this section in the future.

In addition, I must also comment on respondent’s use of the additional State aid revenue. Upon receipt of State aid in an amount greater than that estimated in the budget approved by voters, respondent unilaterally increased the amount of the approved budget and restored certain ordinary contingent expenses.  Respondent does not assert that the restored items were unanticipated contingent expenses, or that the additional funds it received were grants in aid made for specific purposes.  Under these circumstances, respondent had no authority to increase the budget appropriation approved by the voters (see Education Law §1718, 8 NYCRR §170.2[k] and Appeal of Clark, 37 Ed Dept Rep 386, Decision No. 13,885).

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