Appeal of HELLENIC CLASSICAL CHARTER SCHOOL – STATEN ISLAND from action of the New York City Department of Education regarding school utilization.

Decision No. 18,664

(December 17, 2025)

Whiteman Osterman & Hanna LLP, attorneys for petitioner, Kevin P. Quinn, William S. Nolan, and Joseph F. Zeitler, Esqs., of counsel

Muriel Goode-Trufant, Corporation Counsel, attorney for respondent, Todd Krichmar, Esq., of counsel

ROSA., Commissioner.--This decision is issued pursuant to an order of remand by Supreme Court, Albany County.  It began as an appeal to the Commissioner under Education Law § 310 filed by petitioner Hellenic Classical Charter School – Staten Island (“Hellenic”) challenging respondent New York City Department of Education’s (“NYCDOE”) failure to pay appropriate rental assistance pursuant to a prior order.  On November 7, 2023, I issued a decision sustaining the appeal (Appeal of Hellenic Classical Charter School – Staten Island, 63 Ed Dept Rep, Decision No. 18,352 [“Hellenic I”]).  The facts are recited in detail in that decision and need not be repeated here.  For relief, I ordered NYCDOE to reimburse petitioner for its actual rental costs or the statutory formula, whichever was less.  NYCDOE sought review of this decision by commencing an Article 78 proceeding in Supreme Court, Albany County.  In a Decision, Order, and Judgment dated March 19, 2025, the court annulled the decision and remitted the matter to me to fashion an appropriate remedy.

In its decision, the court identified three “red flags” that rendered the lease at issue herein suspect:  (1) the rent had “increased exponentially”; (2) the landlord and tenant are “related part[ies]”[1]; and (3) the landlord used “most” of the rent “to fund other projects on behalf of the [s]chool.”  These findings are supported by the record; the sublease rental rate more than tripled the amount paid under the original lease, petitioner and the Friends of Hellenic have overlapping leadership and governance, and the rent charged under the sublease included costs related to capital improvements and construction of a new facility not yet used by students.  Thus, given the court’s unambiguous opinion that these “red flags” warrant denial of relief to Hellenic, the appeal must be dismissed.

However, I am compelled to address the court’s interpretation of the statutory phrase “actual rental cost.”  The court reasoned that the word “cost” permits NYCDOE to ensure that it—or, more accurately, the State of New York—is only paying for rent.  To an extent, this is uncontroversial; NYCDOE should not, for example, have to pay for the school’s catering or dry-cleaning bills.[2]  The more difficult question, however, is when, if ever, NYCDOE should parse requests for rental assistance to determine how a landlord arrived at a specific rental amount.

The court, relying on the surplusage canon,[3] reasoned that “actual” and “cost” cannot both refer to the bottom-line rental amount.  The court then defined “actual” as “costs that are actually used for the rental of educational facilities.”[4]  This interpretation effectively amends Education Law § 2853 (3) (e) (5) to impose a reasonableness or necessity requirement.  The problem, however, is that the Legislature consistently includes one or both of these adjectives when it seeks to do so (e.g. Education Law §§ 307 [Commissioner may, subject to approval by the Division of the Budget, “amend rules and regulations authorizing the payment of actual reasonable and necessary moving expenses of occupants” of certain properties]; 477 [trustees of city of Yonkers educational construction fund entitled to “actual and necessary expenses incurred in the performance of … official duties”]; and 2118 [school district officers “shall be entitled to be reimbursed for any expenses actually and necessarily incurred in the performance of their official duties”]).  Implying a silent “necessary” in Education Law § 2853 renders that term superfluous in these and many other statutes—the very evil the court sought to avoid.

Additionally, the court’s reasoning presumes that the antonym of “actual” is “not for its intended purpose.”  Most statutes, however, contrast “actual” with the concepts of “projected,” “anticipated,” or “speculative.”  For example, Chapter 537 of the laws of 1976 (as amended by Chapter 798 of the Laws of 1980) permits a large city school district operating a breakfast program to submit “a plan specifying its proposed labor and related costs for the school breakfast program” which may then be approved based upon “the actual cost of the school breakfast program” (emphasis added).  Similarly, Education Law § 359 (2) (a) requires that the Trustees of the State University of New York complete reports that compare their “fiscal year expenditure and revenue plan” with “actual receipts and disbursements.”  And a section of the Charter Schools Act not at issue herein indicates that aid to charter schools on behalf of students with disabilities shall be “based on … projections of initial-year enrollment” which are then “reconciled with … actual enrollment …” (Education Law § 2856 [1] [b] [emphasis added]).

Given this, there is a considerable likelihood that the Legislature used “actual rental cost” as a contrast to “anticipated” or “projected” rental costs.  There is no evidence the court considered this possibility, instead insisting that the phrase “actual rental cost” was intended as a measure to “carefully guard [] the public fisc.”  I discern no such intent—particularly where this provision was included within the 2014 State budget without debate.

For all of the above reasons, I am constrained by the court’s decision to deny petitioner’s request for reimbursement beyond that which it has already received.  This decision, however, is narrowly limited to the facts presented herein.  Thus, unless a charter school submits a request for reimbursement bearing each of the three “red flags” identified by the court, NYCDOE should provide rental assistance without further scrutiny or delay. 

THE APPEAL IS DISMISSED.

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