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Decision No. 16,463

Appeal of DIANE CIRILLO from action of the Board of Education of the Seaford Union Free School District regarding a tax levy and budget practices.

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

Decision No. 16,463

(March 29, 2013)

KING, JR., Commissioner.--Petitioner appeals the adoption of a tax levy for the 2012-2013 school year by the Board of Education of the Seaford Union Free School District (“respondent”). The appeal must be dismissed.

At a special meeting on August 13, 2012, respondent approved a tax levy for the 2012-2013 school year. According to the record, to calculate the tax levy, respondent applied $10,337,949 to offset the amount of taxes that needed to be raised. This appeal ensued. Petitioner’s request for interim relief was denied on September 5, 2012.

Petitioner contends that the $10,337,949 that respondent used to offset the 2012-2013 tax levy does not reflect the “best estimate of state aid” that was reasonably available at the time it issued its 2012-2013 tax warrant. Specifically, petitioner contends that the “2012-2013 state aid projections” prepared by the New York State Education Department (“NYSED”) dated March 27, 2012, indicate that respondent’s estimated 2012-2013 state aid was $10,718,186.00 (“March 27 projection”). Petitioner contends that this amount (and not $10,337,949) constituted the “best estimate of state aid” and should have been used to offset the 2012-2013 taxes that were raised. Petitioner, therefore, argues that respondent understated its state aid for the 2012-2013 school year by $380,237 and requests, among other things, that I order respondent to apply this amount towards its 2013-2014 tax levy.

Respondent admits that, as of March 27, 2012, its 2012-2013 state aid was estimated to be $10,718,186.00, but contends that $991,965.00 of this amount was “deferred building aid” attributable to projects in previous school years.  [1]  Respondent, therefore, maintains that the best estimate of 2012-2013 state aid available at the time that

it issued its 2012-2013 tax warrant was actually $9,726,221 ($10,718,186.00 minus $991,965.00 in deferred building aid). Respondent further maintains that the $991,965.00 in deferred building aid was properly attributed as revenue for the 2011-2012 school year, and, in fact, it used a portion of it ($611,728.00) to offset 2012-2013 taxes.  [2]  Respondent, therefore, denies petitioners’ allegations, and argues that its actions in this matter were reasonable.

I must first address petitioner’s 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 Caswell, 48 Ed Dept Rep 472, Decision No. 15,920; Appeal of Hinson, 48 id. 437, Decision No. 15,908; Appeal of Baez, 48 id. 418, Decision No. 15,901). 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.

Turning to the merits, school districts are required to use the best estimate of state aid that is reasonably available at the time that a tax warrant is issued for purposes of determining a tax levy (see e.g., Appeal of Cook, 47 Ed Dept Rep 402, Decision No. 15,736; Appeal of Muench, 44 id. 398, Decision No. 15,210; Appeal of Muench, 43 id. 419, Decision No. 15,039). Here, petitioner argues that this was NYSED’s March 27 projection ($10,718,186.00). However, it is well settled that boards of education may deviate from state aid projections for purposes of determining the “best estimate” of state aid when there is a satisfactory reason for doing so that is rational, reasonable and consistent with law (see e.g., Appeal of Muench, 45 Ed Dept Rep 508, Decision No. 15,397). The question before me, therefore, is whether respondent’s deviation from the March 27 projection (and its determination that $9,726,221 was the “best estimate” of state aid) was “rational, reasonable, and consistent with law.”

In an appeal to the Commissioner, a petitioner has the burden of demonstrating a clear legal right to the relief requested and the burden of establishing the facts upon which petitioner seeks relief (8 NYCRR §275.10; Appeal of Aversa, 48 Ed Dept Rep 523, Decision No. 15,936; Appeal of Hansen, 48 id. 354, Decision No. 15,884; Appeal of P.M., 48 id. 348, Decision No. 15,882).

On this record, I am unable to conclude that petitioner has met her burden and established that respondent acted improperly. Initially, it is noteworthy that the petition does not contain any allegation that respondent’s actions were irrational, unreasonable, or inconsistent with law. Rather, petitioner simply states that she is “unaware” of any authorization for respondent’s actions and that, while she questioned respondent and attempted to “discern how [its] actions regarding the State aid in question was ‘consistent with law’,” she did not receive a sufficient response from respondent. Such allegations, alone, provide no basis on which to conclude that respondent’s actions were irrational, unreasonable or inconsistent with law.

Moreover, even if the petition could be read as affirmatively alleging that respondent’s actions were improper, petitioner fails to meet her burden of proof.

It is undisputed that the $380,237.00 that petitioner contends should have been applied to the 2012-2013 tax levy derives from the $991,965.00 deferred building aid that respondent received on July 10, 2012. According to the Governmental Accounting Standards Board, which sets forth generally accepted accounting principles for State and local governments, revenue is allowed to be accrued as follows:

Revenues and other governmental fund financial resource increments (for example, bond issue proceeds) are recognized in the accounting period in which they become susceptible to accrual - that is, when they become both measurable and available to finance expenditures of the fiscal period. "Available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period (Codification of Governmental Accounting and Financial Reporting Standards §1600.106 [2012]).

Therefore, as long as the $991,965.00 deferred building aid met the above-noted criteria, respondent could properly include it as accrued revenue in the 2011-2012 school year. Petitioner does not allege or establish that such criteria were not satisfied. Consequently, to the extent that petitioner may claim that respondent’s “accounting” of these funds was improper, such claim must fail, and I cannot conclude that respondent’s inclusion of these funds in 2011-2012 revenue, rather than in its 2012-2013 state aid estimate, was inappropriate.

Further, to the extent petitioner contends that respondent should have used the $991,965.00 of deferred building aid dollar-for-dollar to offset the 2012-2013 tax levy, petitioner sets forth no legal basis for such claim. As noted above, respondent included the deferred building aid as revenue accrued in the 2011-2012 school year and, as such, those funds were subject to the calculation of any surplus revenues pursuant to RPTL §1318(1).  [3] Petitioner sets forth no other statutory provision requiring any part of the deferred building aid to be directly applied to the 2012-2013 tax levy.

In sum, I am unable to conclude, on this record, that respondent’s treatment of the deferred building aid it received on July 10, 2012 was improper or that its deviation from NYSED’s March 27 projection was irrational, unreasonable, or inconsistent with law. Consequently, I cannot find that respondent failed to use the “best estimate” of state aid that was reasonably available to it at the time that it issued its 2012-2013 tax warrant.





[1]   Respondent received payment of the deferred building aid on July 10, 2012.


[2]   Real Property Tax Law (“RPTL”) §1318(1) requires that school districts use any unexpended operating funds that exceed four percent of their current school year budget to offset taxes. Respondent contends, and petitioner does not dispute, that it did not retain more than the permitted four percent for the 2012-2013 school year.


[3]   As noted above, petitioner does not contend that respondent retained in excess of four percent of its operating budget in violation of RPTL §1318(1).