Appeal of CHRISTOPHER WOOD and HELEN GROSSO from actions of the Board of Education of the Pawling Central School District, JohnPaul Ragusa, a former board member, W. Michael Mahoney, superintendent of schools, and Warren Donohue, assistant superintendent for business, regarding financial practices and application for the removal of Robert Hill, as president and member of the board, Coleen Snow, as vice-president and member of the board, and Thomas Johnson and Christine Walters as members of the Board of Education of the Pawling Central School District.

Decision No. 17,358

(March 26, 2018)

Advocates for Justice, attorneys for petitioners, Laura D. Barbieri and Arthur Z. Schwartz, Esqs., of counsel

Girvin Felazzo, P.C., attorneys for respondents, Kristine A. Lanchantin, Esq., of counsel

ELIA, Commissioner.--Petitioners challenge certain financial practices of the Board of Education of the Pawling Central School District (“respondent board” or “the board”), JohnPaul Ragusa, as a former member of the board, Superintendent of Schools W. Michael Mahoney, and Warren Donohue, Assistant Superintendent for Business.  Based on such practices, petitioners also seek the removal of respondents Robert Hill (“Hill”), as president and member of the board, Coleen Snow  (“Snow”) as vice president[1] and member of the board, and Thomas Johnson and Christine Walters as members of the board (collectively referred to as “respondents”).[2]  The application for removal must be denied and the appeal must be sustained in part.

Petitioners, who are residents and taxpayers of the Pawling Central School District, allege that respondent board over a period of years has failed to accurately budget and has knowingly overestimated expenses and accumulated a surplus of unspent funds in violation of Real Property Tax Law (“RPTL”) §1318 that should have been returned to district taxpayers.  Specifically, petitioners assert that respondent board improperly inflated its budget for “at least” the 2011-2012 through the 2013-2014 school years and allege that respondents admitted that there was a substantial surplus fund balance that remained from the 2011-2012 school year and accumulated through the 2012-2013 school year.  Petitioners assert that respondent board’s external auditor advised respondents of the existence of a surplus fund balance in excess of $3 million.  Petitioners further allege that at a board meeting on April 29, 2013, respondent board determined not to return the 2011-2012 fund balance to the taxpayers in the following year’s tax levy but decided instead to place such funds in a reserve fund, which petitioners characterize as a “surplus tax reserve account.”  Petitioners contend that respondent board members failed to properly manage the district employees responsible for the budget, misled the taxpayers about the surplus fund balance and deliberately underestimated surplus funds for both the 2012-2013 and 2013-2014 school years.  Petitioners assert that Hill, Johnson, Snow and Walters should be removed for this “repeated and knowingly wrongful conduct.”

Petitioners request that respondent board be enjoined from collecting school taxes in excess of amounts authorized by the RPTL and that the unexpended surplus “of at least $4 million” be distributed to taxpayers, with the amount to be determined by the district’s external auditors at the end of the 2012-2013 school year.  Finally, petitioners request an order directing respondent board to form a “Special Budget Committee” consisting of members of the board, staff members and members of the public to be charged with the production of the budget, ascertaining the true amount of any unexpended surplus and to “budget as against the true costs of running the school district” and inform the public of those true costs.

Respondents generally deny any wrongdoing and assert that they had rational and fiscally prudent reasons to retain the excess surplus funds from the 2011-2012 school year as reserve funds.  They assert that in September 2012, after taxes had been levied, they received their annual external audit, which informed them that at the end of the 2011-2012 school year, they had an unexpended unappropriated surplus fund balance, which exceeded the four percent limit imposed by RPTL §1318(1) by approximately $1.6 million.  Respondents assert that thereafter, the board repeatedly discussed in public session whether to retain the 2011-2012 excess unexpended surplus funds as reserve funds or reduce the current school year’s tax levy.  On April 29, 2013, respondent board, upon the recommendation of the district’s fiscal staff, decided to retain approximately $1.6 million in excess unassigned funds as reserve funds.[3],[4]  Respondents further contend that they acted after consultation with both internal and external auditors and had rational and fiscally prudent reasons for retaining the $1.6 million surplus in various reserve funds and the petition therefore fails to state a claim upon which relief may be granted. 

Respondents also state that the appeal must be dismissed as untimely with respect to all fiscal years prior to the 2012-2013 school year.  Respondents also assert that petitioners’ claim relating to the retention of unexpended surplus funds at the end of the 2012-2013 school year was not ripe for review when this appeal was commenced because respondent board had not yet definitely determined the amount of the unexpended surplus and what action(s) would be taken with respect to any such surplus. Respondents also assert that the appeal must be dismissed as to respondents JohnPaul Ragusa and Warren Donohue because of improper service.  Respondents further contend that the application for removal of respondent JohnPaul Ragusa must be dismissed as moot because his term as a board member expired on May 21, 2013.  Respondents further contend that petitioners have failed to establish that the respondent board members engaged in a wilful violation of law or neglect of duty or wilfully disobeyed a decision, order or rule or regulation of the Board of Regents or the Commissioner of Education that would warrant their removal.  Respondents further contend that petitioners have failed to establish a clear legal right to an order requiring respondent Board to establish a Special Budget Committee and petitioners should be admonished for making “baseless claims of deliberate overestimations of the budget and cover-ups regarding any excess surplus.”  Finally, respondents contend that the individual respondents discharged their duties in good faith and should be issued a certificate of good faith pursuant to Education Law §3811.

I must first address several procedural issues.  Respondents object to petitioners’ submission of a “Reply Memorandum of Law in Further Support of Verified Petition,” arguing that prior approval of the Commissioner for submission of a reply memorandum was not obtained as required by 8 NYCRR §276.4, and the document was untimely.  Here, petitioners did not serve a reply within 10 days of service of the answer, as required by 8 NYCRR §275.14(a), nor did they request an extension of the time to reply for good cause shown pursuant to 8 NYCRR §276.3(a).  Similarly, they did not submit a memorandum of law within 20 days of service of the answer (or 10 days after service of a reply), as required by 8 NYCRR §276.4(a).  However, the late submission of a memorandum of law may be excused where the petitioner demonstrates that there was good cause for the delay and the necessity of the memorandum to determination of the appeal (see 8 NYCRR §274.6[a]).  Here, the document submitted is not in the form of a reply responding to the numbered paragraphs in the answer.  Rather, it presents legal arguments in response to the affirmative defenses raised in the answer and appears to be in the nature of a memorandum of law, though it improperly attempts to include an exhibit that was not submitted in the petition or in a reply.

Regardless of whether I consider the document to be a reply, a memorandum of law or a reply memorandum of law, it is clearly untimely and petitioners did not obtain prior approval for its submission (see e.g. Application of Jones, et al., 55 Ed Dept Rep, Decision No. 16,823).  In an affirmation, one of petitioners’ attorneys argues that the “Reply Memorandum” was submitted several days late because she had a gas leak in her apartment, which required demolition of her kitchen, and that the “Reply Memorandum” should be accepted because it will assist the Commissioner in rendering a fair decision.  However, the petition was signed by two attorneys from Advocates for Justice, and petitioners provide no explanation as to why the second attorney could not have submitted a timely memorandum of law or reply.  Accordingly, I find that petitioners have not established good cause for the delay and I decline to accept the late “Reply Memorandum” for filing and have not considered it in deciding this appeal.

Respondents contend that respondents JohnPaul Ragusa and Warren Donohue were not properly served, and the appeal must be dismissed as to them.  In the answer, respondents allege that the petition was left with the wives of both respondents Ragusa and Donohue on June 6, 2013, but petitioners failed to provide any evidence of a diligent search for such respondents.  This is corroborated by the affidavits of respondents Ragusa and Donohue.

Section 275.8(a) of the Commissioner’s regulations requires that a copy of the petition:

... shall be personally served upon each named respondent, or, if a named respondent cannot be found upon diligent search, by delivering and leaving the same at the respondent’s residence with some person of suitable age and discretion ....

(8 NYCRR §275.8[a]).  Petitioners did not serve or submit a reply or otherwise submit evidence that a diligent search was made for respondents Ragusa or Donohue before resorting to the method of substitute service.  Absent evidence of diligent efforts to effect service upon these respondents, substitute service upon a person of suitable age and discretion is ineffectual (see Appeal of Murphy, 57 Ed Dept Rep, Decision No 17,234; Appeal of Livingston, 56 id., Decision No. 17,087; Appeal of Boni, 41 id. 214, Decision No. 14,666; judgment granted dismissing petition to review sub nom. Boni, et al. v. Mills, et al., Sup. Ct., Albany Co., Special Term; Bradley, J.; January 7, 2003).  Although §275.8(a) of the Commissioner’s regulations permits service of a petition on a person of suitable age and discretion at the respondent’s residence where the respondent cannot be found, there is no authority for other forms of alternative service, absent express authorization from the Commissioner (Appeal of Boni, 41 Ed Dept Rep 214, Decision No. 14,666; judgment granted dismissing petition to review sub nom. Boni, et al. v. Mills, et al., Sup. Ct., Albany Co., Special Term; Bradley, J.; January 7, 2003; Applications of Balen, 40 Ed Dept Rep 250, Decision No. 14,474; Appeal of Ponella, 38 id. 610, Decision No. 14,103).  Since petitioners did not obtain approval of the Commissioner for any alternative form of service, the appeal must be dismissed as to respondents Ragusa and Donohue for improper service.  However, I note that the petition seeks no relief as against respondents Ragusa or Donohue, and there is no evidence in the record that either of them would be adversely affected by a determination in favor of petitioners.[5]  Therefore, I find that they are not necessary parties and their dismissal from this appeal is not a basis for dismissal of this appeal and application.

Respondents argue that to the extent petitioners make allegations about respondents’ actions in developing school district budgets in school years prior to the 2012-2013 school year, the appeal must be dismissed as untimely.   An appeal to the Commissioner must be commenced within 30 days from the making of the decision or the performance of the act complained of, unless any delay is excused by the Commissioner for good cause shown (8 NYCRR §275.16; Appeal of Lippolt, 48 Ed Dept Rep 457, Decision No. 15,914; Appeal of Williams, 48 id. 343, Decision No. 15,879).  The 30-day limitation period also applies to a removal application made pursuant to Education Law §306 (8 NYCRR §277.1; Application of Kelty, 48 Ed Dept Rep 476, Decision No. 15,921; Appeal of Budich, 48 id. 383, Decision No. 15,892).  In addition, a removal application may be timely commenced within 30 days of the petitioner’s good faith discovery of the alleged conduct even though the actual conduct occurred more than 30 days before the application was instituted (Application of Nett and Raby, 45 Ed Dept Rep 259, Decision No. 15,315; Application of Bean, 42 id. 171, Decision No. 14,810).  Here, petitioners allege that respondents failed to accurately budget for the actual number of students served and overestimated expenses and thereby improperly inflated the school district budgets for “at least school years 2011-2012 through 2013-2014,” causing accumulation of a substantial surplus.  Petitioners further allege that respondents failed to inform the district’s taxpayers of the accumulated surpluses.  Although the accumulation of a substantial surplus during this period is undeniable, petitioners have neither alleged nor proven that they commenced this appeal within 30 days of their good faith discovery of the alleged misconduct.  Therefore, petitioners’ claims with respect to development of the school district budgets for school years prior to the 2012-2013 school year must be dismissed as untimely.

However, I reject respondents’ argument that petitioners’ claims relating to retention of surplus funds from the 2011-2012 school year in the 2012-2013 school year budget are untimely.  The Commissioner has repeatedly ruled that appeals claiming that surplus funds have been retained in violation of RPTL §1318(1) are timely if brought within the school year in which the unexpended surplus funds are retained (Appeal of Delessio, 57 Ed Dept Rep, Decision No. 17,220; Appeal of Gorman, 52 id., Decision No. 16,412; Appeal of Wolfley and McCauley, 50 id., Decision No. 16,225; Appeal of Golden, 45 id. 392, Decision No. 15,362; Appeal of Uy and Norden, 44 id. 368, Decision No. 15,201; Appeals of Gorman, 43 id. 32, Decision No. 14,906).  This appeal was commenced on May 28, 2013, during the 2012-2013 school year, which is the school year budget in which surplus funds from the 2011-2012 school year were allegedly improperly retained.  Thus, I find that the appeal and application are timely with respect to the allegedly improper retention of funds in the budget for the 2012-2013 school year.

I must also dismiss as premature petitioners’ claim that respondents were about to illegally retain unexpended surplus funds in the 2013-2014 budget rather than using such funds to reduce the 2013-2014 tax levy.  The Commissioner will not render an advisory opinion on an issue before it becomes justiciable (Appeal of B.R. and M.R., 48 Ed Dept Rep 291, Decision No. 15,861; Appeal of Lachler, 47 id. 455, Decision No. 15,752).  The record indicates that, as of the time this proceeding was commenced, respondents had not yet decided the amount of funds that would be retained in reserve funds or the amount that would be used to reduce the tax levy for the 2013-2014 school year.  Therefore, to the extent petitioners contend that respondents’ retention of unexpended surplus fund balance in the 2013-2014 school year, beyond the amount of the 2011-2012 surplus, violated RPTL §1318(1), the appeal was premature when brought.

To the extent petitioners seek an order requiring respondent board to establish a Special Budget Committee (“Committee”), the appeal must be dismissed for failure to establish a clear legal right to such relief.  As described in the petition, the Committee, which would include members of the board, the district and the public, would be charged with the production of the budget, ascertaining the amount of unexpended surplus funds, determining the “true costs” of running the district and informing the public.  Petitioners cite no authority for such extraordinary relief, which would be in derogation of respondent board of education’s responsibilities for budgeting and management of the school district under various provisions of law, including Education Law §§1709(20) and (33), 1716, 1804(1) and (4), 2022 and 2023.  I find no legal basis for ordering the establishment of a Committee that would usurp the statutory role of the board of education over budgeting and this claim must also be dismissed.

Finally, the applications for removal of several of the individual respondents must be denied 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 a Student with a Disability, 48 Ed Dept Rep 532, Decision No. 15,940; Appeal of M.M., 48 id. 527, Decision No. 15,937; Appeal of Embro, 48 id. 204, Decision No. 15,836).  I take judicial notice that respondent board’s official website indicates that respondents Hill, Johnson and Walters are no longer members of the board of education.  Thus, the application for their removal is moot, warranting denial (Application of Johnson, et al., 56 Ed Dept Rep, Decision No. 17,055; Appeal of Anderson, et al., 52 id., Decision No. 16,438; Application of Lilly, 47 id. 307, Decision No. 15,705).[6]

In addition, the appeal is also moot to the extent petitioners seek an order directing that at least four million dollars in unexpended surplus funds be returned to the taxpayers.  The gravamen of petitioners’ claim is that respondents improperly retained an unexpended surplus from 2011-2012 in excess of the four percent limit in the 2012-2013 school year and then improperly determined to deposit the 2011-2012 surplus funds in reserve funds rather than apply the surplus funds to the reduction of tax levy in the 2013-2014 school year.  However, there is no mechanism for returning a pro rata share of funds to the taxpayers once the tax levy is made, and the appeal is moot to the extent such relief is sought (Appeal of Wille, 56 Ed Dept Rep, Decision No. 17,050; Appeal of Liberatore, 42 id. 321, Decision No. 14,869).  Nevertheless, "[i]t is settled doctrine that an appeal will, nevertheless, be entertained where, as here, the controversy is of a character which is likely to recur not only with respect to the [same] parties ... but with respect to others as well" (East Meadow Community Concerts Ass’n v. Bd. of Educ., Union Free School Dist. No. 3, County of Nassau, 18 NY2d 129, 135; Appeal of Wille, 56 Ed Dept Rep, Decision No. 17,050; Appeal of Muench, 45 id. 508, Decision No. 15,397).  Accordingly, I decline to dismiss this appeal as moot to the extent petitioners seek other relief relating to respondents’ compliance with RPTL §1318(1) because it raises an important legal issue concerning the deposit of funds in reserve funds which affects all districts and taxpayers statewide.

Turning to the merits, RPTL §1318(1) requires that at the conclusion of each fiscal year, a board of education must apply any unexpended surplus funds to reduce its tax levy for the upcoming school year.  Surplus funds are currently defined as “any operating funds in excess of four percent of the current school year budget and shall not include funds properly retained under other sections of law” (RPTL §1318[1]).  Accordingly, at the end of each school year, all unexpended operating funds in excess of four percent of the budget for the upcoming school year must be applied to reduce the tax levy (Appeal of Gorman, 52 Ed Dept Rep, Decision No. 16,412; Appeal of Wolfley and McCauley, 50 id., Decision No. 16,225; Appeal of Giardina, 46 id. 524, Decision No. 15,583).

RPTL §1318(1) excludes from the definition of “surplus funds”, those funds “properly retained under other sections of law”.  The Commissioner has determined that this authority to retain funds beyond the limit imposed by RPTL §1318(1) applies only to reserve funds specifically authorized by law (Appeal of Giardina, 46 Ed Dept Rep 524, Decision No. 15,583; Appeals of Gorman, 43 id. 32, Decision No. 14,906; Appeal of Simons, 39 id. 744, Decision No. 14,367).  Respondents argue that after being advised by their external auditor in September 2012 that they had retained $1.6 million in excess 2011-2012 unexpended surplus funds in violation of RPTL §1318(1), they went through a public, deliberative process between October 2012 and April 2013 that culminated in their decision to place the funds in an existing tax certiorari reserve fund and four new reserve funds authorized by law.  They argue that they acted within their vested powers and had rational and fiscally prudent reasons for retaining the 2011-2012 surplus funds in the various reserve funds.  Petitioners allege that respondents improperly deposited the surplus funds in a “surplus tax reserve account”, which respondents deny.

There is no evidence in the record to support petitioners’ contention that respondents deposited the 2011-2012 surplus funds in a “surplus tax reserve account” or tax stabilization reserve fund as a means of spreading the reduction of the tax levy over a period of years.  The record indicates that in April 2013, respondent board voted to distribute the $1.6 million among five reserve funds.

However, it is well-settled that if a board of education wishes to retain unexpended surplus funds, it should place the money in a reserve fund before the tax levy (Appeal of Wille, 56 Ed Dept Rep, Decision No. 17,050; Appeals of Gorman, 43 id. 32, Decision No. 14,906; Appeal of Simons, 39 id. 744, Decision No. 14,367; Application of Mills, 34 id. 92, Decision No. 13,243).  Similarly, the Commissioner has ruled that transfers to reserve funds, if otherwise authorized, may be made prior to the imposition of the tax levy (Appeal of Muench, 44 Ed Dept Rep 398, Decision No. 15,210).  However, the Commissioner has also ruled that it is impermissible for a board of education to circumvent RPTL §1318(1) by retroactively assigning the surplus funds to a reserve fund (Appeal of Wille, 56 Ed Dept Rep, Decision No. 17,050; Appeal of Giardina, 46 id. 524, Decision No. 15,583).  The import of such decisions is that once taxes were levied, respondent board had no authority to assign the 2011-2012 surplus funds to reserve funds for use in future school years regardless of when the board discovered that the unexpended surplus funds carried into the 2012-2013 school year budget exceeded the four percent limit in violation of RPTL §1318(1).  Respondent board’s only option consistent with RPTL §1318(1), once respondent discovered that RPTL §1318(1) had been violated, was to use the 2011-2012 excess surplus funds to reduce the tax levy in the next possible school year, in this case the 2013-2014 school year.

Respondents’ superintendent indicates in his affidavit that upon advice of their auditors “we intend to wait until the accounting is finalized from the 2012-2013 school year to determine whether a further reduction in the tax levy is necessary or if funds, or portions thereof, may be properly retained in reserve funds.”  It is not entirely clear, however, whether respondents intend in the future to wait to retain funds until after they receive the district audit, which, as the facts of this appeal indicate, may not be until after the tax levy.  The reference to when “the accounting is finalized” suggests that respondents intend to continue the practice described in this appeal, which would be in violation of RPTL §1318(1).  Therefore, I direct respondent board to review its budgeting practices and to fully comply with RPTL §1318(1) in the future and, in accordance with this decision, to apply to the reduction of tax levy any unexpended surplus funds from the prior school year that were not lawfully assigned to reserve funds on or before the date of the tax levy.

As to the application for removal of board members, the only respondent who remains on respondent board is Coleen Snow, who the official website of respondents’ district identifies as the current president of the board.

A member of the board of education or a school officer may be removed from office pursuant to Education Law §306 when it is proven to the satisfaction of the Commissioner that the board member or school officer has engaged in a wilful violation or neglect of duty under the Education Law or has wilfully disobeyed a decision, order, rule or regulation of the Board of Regents or Commissioner of Education (Application of Kolbmann, 48 Ed Dept Rep 370, Decision No. 15,888; Application of Schenk, 47 id. 375, Decision No. 15,729).  School district officers can only be removed under §306 when they engage in a "wilful violation or neglect of duty."  To be considered “wilful,” respondent’s actions must have been intentional and with a wrongful purpose (Appeal of Christiano, 50 Ed Dept Rep, Decision No. 16,217; Appeal of Giardina, 46 id. 524, Decision No. 15,583; Application of Coleman, 45 id. 282, Decision No. 15,324; Application of Kavitsky, 41 id. 231, Decision No. 14,672).  Mere negligence on the part of a school officer is not enough to warrant removal (Appeal of Schofield, 34 Ed Dept Rep 143, Decision No. 13,263.  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).

n this record, petitioners have failed to establish facts sufficient to warrant the removal of respondent Snow.  Petitioners make a series of conclusory allegations that respondent Snow and other members of respondent board knowingly engaged in a pattern of conduct over a period of years to accumulate unlawful surpluses, including knowingly overestimating expenses and failing to accurately budget for declining student enrollment; have intentionally misled voters; have failed to employ sound financial practices; and have failed to properly oversee and manage the budget process.  However, while petitioners have demonstrated that respondents violated RPTL §1318(1) by retaining unexpended surplus in excess of the statutory limit in the 2012-2013 school year, and then improperly depositing the excess amount in reserve funds, rather than applying such funds to the reduction of tax levy in the following year, they have failed to provide evidence to support such allegations of a pattern of fiscal mismanagement or of misleading voters with respect to respondent Snow. 

With respect to respondents’ actions in unlawfully retaining surplus funds in the 2012-2013 school year, respondents contend that they did not know that the 4 percent limit had been exceeded until September 2012, when they received the annual audit.  Petitioners have not provided evidence to rebut respondents’ allegation in this regard, and in fact the property tax report card for the 2011-2012 school year, which is attached to the petition as an exhibit, includes an estimate that the adjusted unrestricted fund balance in the 2012-2013 school year would be at 4 percent, indicating anticipated compliance with the statute. 

As to respondents’ decision to deposit the 2011-2012 surplus funds in reserve funds, the record indicates that respondent board deliberated publicly over how such funds should be used and determined that it was fiscally prudent to establish the various reserve funds to meet documented needs.[7]  It was not intrinsically unlawful for respondents to establish new reserve funds or assign funds to the existing tax certiorari reserve fund and petitioners have not proven that respondent Snow intentionally violated a law with a wrongful purpose by voting to approve the deposit of the 2011-2012 excess surplus in the various reserve funds.  To the contrary, the record indicates that respondents, including respondent Snow, acted after consulting with their external auditors and in furtherance of what they viewed as the most fiscally prudent use of the excess surplus funds.

On this record, therefore, I find that petitioners have not met their burden of proving that respondent Snow engaged in a wilful violation of law or neglect of duty that would warrant her removal.

Finally, respondents request a certificate of good faith pursuant to Education Law §3811(1).  Such certification is solely for the purpose of authorizing the board to indemnify a respondent for legal fees and expenses incurred in defending a proceeding arising out of the exercise of his or her powers or performance of duties as a board member or other position listed in §3811(1), which includes the superintendent of schools and other members of the teaching or supervisory staff.  It is appropriate to issue such certification unless it is established on the record that the requesting respondent acted in bad faith (Application of Valentin, 56 Ed Dept Rep, Decision No. 17,014; Application of Paladino, 53 id., Decision No. 16,594; Application of Lieberman, 52 id., Decision No. 16,483).  In view of the facts that the application here is denied, that the appeal has been dismissed on procedural grounds as to respondents Ragusa, Hill, Johnson, Walters and Donohue, and that there has been no finding that any of the individual respondents acted in bad faith, I hereby certify solely for the purpose of Education Law §3811(1) that the individual respondents are entitled to receive the requested certificate of good faith, with the admonition such certificate is in no way to be construed as approval of the actions taken by respondents. 

In light of this disposition, I find that the parties’ remaining claims have no merit.

THE APPLICATION FOR REMOVAL IS DENIED AND THE APPEAL IS SUSTAINED TO THE EXTENT INDICATED.

IT IS ORDERED that Respondent Board of Education of the Pawling Central School District review its budgeting practices and henceforth fully comply with the requirements of Real Property Tax Law §1318(1); and

IT IS FURTHER ORDERED that Respondent Board of Education of the Pawling Central School District, in accordance with this decision, in the future apply to the reduction of the tax levy any unexpended surplus funds from the prior school year that were not lawfully assigned to reserve funds on or before the date of the tax levy.

END OF FILE.