Appeal of the BOARD OF EDUCATION OF THE NEW HYDE PARK-GARDEN CITY PARK UNION FREE SCHOOL DISTRICT from action of the New York City Department of Education relating to reimbursement for the provision of health and welfare services.

Decision No. 17,397

(May 30, 2018)

Lamb & Barnosky, LLP, attorneys for petitioner, Lauren Schnitzer, Esq., of counsel

Zachary W. Carter, Esq., Corporation Counsel, attorney for respondent, Scott Glotzer, Esq., of counsel

ELIA, Commissioner.--Petitioner appeals the refusal of the New York City Department of Education (“respondent”) to reimburse it for providing health and welfare services to alleged residents of respondent’s district who attended a private school in petitioner’s district during the 2009-2010 through 2013-2014 school years.  The appeal must be sustained in part.

On May 11, 2010, petitioner submitted an invoice to respondent pursuant to Education Law §912, for reimbursement of health and welfare costs incurred on behalf of 51 students who allegedly resided in respondent's district, but attended a nonpublic school in petitioner's district, during the 2009-2010 school year. Petitioner calculated the per student cost of such services at $696.52.  In support of its invoice, petitioner submitted a list of student names and addresses as well as, according to petitioner, affirmations completed by the parents of the 51 students whereby the parents attested to their residence within respondent’s district.[1] 

On June 10, 2010, petitioner sent a second invoice for $696.52 representing the cost of one additional student who had attended a nonpublic school for the 2009-2010 school year.  Petitioner included an affirmation from the parent of this student which attested to the parent’s residence within respondent’s district.

In a letter dated August 26, 2010, respondent requested additional information as to how petitioner calculated the per student rate.  Petitioner responded by facsimile the same day, providing the requested information.

Together with a letter dated October 8, 2010, respondent reimbursed petitioner for $25,074,72, which represented 36 of the 51 students.  Respondent submitted a copy of the student names and addresses initially submitted by petitioner on May 11, 2010 containing, for four lines, handwritten notations stating “not NYC.”

In a letter dated October 20, 2010, petitioner asserted that respondent owed it $10,447.80, reflecting the balance owed for 15 students.  Petitioner further indicated that although the mailing addresses for the four disputed students was Hyde Park, these addresses were, in fact, within respondent’s jurisdiction.  Petitioner resubmitted the parental affirmations for these four students.

On or about January 31, 2011, respondent issued payment of $2,786.08 for the four students whose residency it had initially questioned.

In a letter dated June 3, 2011, petitioner indicated that reimbursement remained pending for 11 of the 51 students.  Respondent thereafter issued payment to petitioner for the cost of nine students less a “fee of $3.50.”  Thus, petitioner’s reimbursement claims for the 2009-2010 school year remain pending for two of the 51 students.[2]

On May 14, 2011, petitioner submitted an invoice to respondent pursuant to Education Law §912, for reimbursement of health and welfare costs incurred on behalf of 50 students who allegedly resided in respondent's district, but attended a nonpublic school in petitioner's district, during the 2010-2011 school year. Petitioner calculated the per student cost of such services at $750.65.  In support of its invoice, petitioner submitted affirmations completed by the parents of the 50 students whereby the parents attested to their residence within respondent’s district.

Together with a letter dated March 27, 2012, respondent reimbursed petitioner for nine of the 50 students.  In doing so, respondent submitted a chart with the 50 students’ names which included the notation “[v]erify place of resident [sic]” next to the 41 students for whom it did not provide reimbursement. 

In an invoice dated June 14, 2011, petitioner submitted the same information it had previously provided to substantiate the residency of the disputed 41 students.  Additionally, after this appeal was commenced, respondent reviewed its records and reimbursed petitioner for one additional student. Therefore, petitioner’s reimbursement claims for the 2010-2011 school year remain pending for 40 of the 50 students.

On May 14, 2012, petitioner submitted an invoice to respondent pursuant to Education Law §912, for reimbursement of health and welfare costs incurred on behalf of 51 students who allegedly resided in respondent's district, but attended a nonpublic school in petitioner's district, during the 2011-2012 school year. Petitioner calculated the per student cost of such services at $800.20.  In support of its invoice, petitioner submitted affirmations completed by the parents of the 51 students whereby the parents attested to their residence within respondent’s district.

In a letter dated July 24, 2012, respondent stated that:

According to the law states that the students should be presented two forms of proof of residence during the admission.  The parental support form and utility bill are supporting documentation for the mentioned matter.  Also, the incomplete forms could not be processed.  None of the forms filled with DOB.  So, please submit the completed form and utility bill along with invoices.[3]

Petitioner subsequently submitted the following information to respondent: (1) its calculation of health and welfare services; (2) a list of students; (3) copies of the affirmations identified above; and (4) students’ dates of birth.

On March 3, 2014, respondent issued reimbursement for 11 students.  Additionally, after this appeal was commenced, respondent reviewed its records and reimbursed petitioner for two additional students.  Therefore, petitioner’s reimbursement claims for the 2011-2012 school year remain pending for 38 of the 51 students.

On May 14, 2013, petitioner submitted an invoice to respondent pursuant to Education Law §912, for reimbursement of health and welfare costs incurred on behalf of 63 students who allegedly resided in respondent's district, but attended a nonpublic school in petitioner's district, during the 2012-2013 school year. Petitioner calculated the per student cost of such services at $820.90.  In support of its invoice, petitioner submitted affirmations completed by the parents of the 63 students whereby the parents attested to their residence within respondent’s district.[4]

In a letter dated September 4, 2013, respondent asserted that “some documents [we]re not included”; namely, “rate calculation details, contract letter for FY 2012-12 and some student’s proof of residents [sic].”

On September 13, 2013, petitioner replied to respondent.  Petitioner provided the requested rate calculation sheet, indicated that any proof of residency had already been transmitted to respondent, and requested clarification as to respondent’s “contract letter” request.

On or about September 25, 2013, respondent reimbursed petitioner for 60 of the 63 students.  Therefore, petitioner’s reimbursement claims for the 2012-2013 school year remain pending for three of the 63 students.

On June 30, 2014, petitioner submitted an invoice to respondent pursuant to Education Law §912, for reimbursement of health and welfare costs incurred on behalf of 64 students who allegedly resided in respondent's district, but attended a nonpublic school in petitioner's district, during the 2013-2014 school year. Petitioner calculated the per student cost of such services at $843.79.  Petitioner contends that, in support of its invoice, petitioner submitted affirmations completed by the parents for each of the 64 students whereby the parents attested to their residence within respondent’s district.

Together with a letter dated September 9, 2014, respondent reimbursed petitioner for 12 of the 64 students.  Respondent further requested that petitioner “[p]rovide proof of residence and date[s] of birth for the [49] students listed in the attached spread sheet.”

After this appeal was commenced, respondent reviewed its records and reimbursed petitioner for 38 additional students.  Therefore, petitioner’s reimbursement claims for the 2013-2014 school year remain pending for 14 of the 64 students.[5]  This appeal ensued.

Petitioner contends that respondent’s denials of its requests for reimbursement were arbitrary and capricious.  Petitioner contends that it submitted signed affirmations from each of the parents which each request whereby the parents attested to their residency within respondent’s district.  Petitioner further argues that respondent acted arbitrarily by issuing reimbursement for some students but not others even though each request was supported by identical proof.  Petitioner seeks reimbursement for the students for whom respondent has not yet provided reimbursement as detailed above.

Respondent contends that its determinations were rational as it has provided, and continues to provide, reimbursement for those students whom it has determined reside within its district.  Respondent avers that it utilized a database called Automate the Schools (“ATS”) to ascertain the addresses of the students in question, and that this database maintains “accurate student address information” on students located within its district.

First, I must address a procedural matter.  While petitioner references in the petition a $3.50 “check fee” allegedly imposed by respondent, petitioner requests reimbursement for this fee for the first time in its 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 Nappi, 57 Ed Dept Rep, Decision No. 17,300; Appeal of Caswell, 48 id. 472, Decision No. 15,920; Appeal of Hinson, 48 id. 437, Decision No. 15,908).  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.  Accordingly, I need not address petitioner’s requested relief in the form of reimbursement of the check fee, which was raised for the first time in the reply.

Next, I must address the issue of timeliness.  In this proceeding, petitioner seeks reimbursement for costs incurred over five school years.  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).  However, within the context of health services reimbursement appeals pursuant to Education Law §912, the Commissioner has long declined to apply the 30-day time limitation.  This holding can be traced back to Matter of Union Free School District No. 3, Town of Eastchester (77 State Dept Rep 130), where the Commissioner held that the 30-day time limitation did not bar a health services reimbursement claim spanning two school years because a school district’s obligation to provide health services was “continuing.”  Notably, however, the Commissioner also indicated that “it is my view that if a matter of this kind is to be determined, it should be done so promptly ....”  Nevertheless, subsequent decisions of the Commissioner have relied upon the continuing obligation rationale and have not applied the 30-day time limitation to such claims (Appeal of the Bd. of Educ. of the Brighton Central Sch. Dist., 36 Ed Dept Rep 381, Decision No. 13,755; Matter of Board of Education of the City School District of the City of Long Beach, 5 id. 180, Decision No. 7,633; Matter of Central High School District No. 2, Towns of Hempstead and North Hempstead, 2 id. 255, Decision No. 7,066).

While the actual provision of health services is continuing and a district’s refusal to provide such services would constitute a continuing wrong, the instant action is simply a claim for monetary reimbursement.  In the related context of reimbursement for foster care tuition payments pursuant to Education Law §3204(4)(a), claims relating to a particular school year become due at the completion of that school year, and an appeal pursuant to Education Law §310 must be commenced within 30 days of the end of the school year in order to be timely (Appeal of the Board of Education of the Town of Webb Union Free School District, 40 Ed Dept Rep 449, Decision No. 14,524; Appeal of the Sole Trustee of the Hickory-South Mountain Common School District No. 1, 38 id. 577, Decision No. 14,097; Matter of Sanfilippo, 24 id. 81, Decision No. 11,323).  I find the reasoning of those appeals persuasive and hereby hold that, in an appeal to the Commissioner pursuant to Education Law §310 seeking reimbursement for health services, the appeal must be commenced within 30 days after the conclusion of the school year in which the costs were incurred.  This rule affords districts of location ample time to present a demand to districts of residence and bring an appeal if necessary.  Additionally, this rule notwithstanding, I note that a late appeal may be excused by the Commissioner for good cause set forth in the petition (8 NYCRR §275.16; see Matter of Central High School District No. 2, Towns of Hempstead and North Hempstead, 2 Ed Dept Rep 255, Decision No. 7,066 [district of residence could not complain of delay on district of location’s part in commencing an appeal where district of residence did not respond to district of location’s invoice for nine months]).  Those appeals applying a contrary holding are hereby overruled.

Nevertheless, respondent has not raised timeliness as a defense in this appeal and given the parties’ reliance on prior Commissioner’s decisions that declined to apply the 30-day time limitation, it would be fundamentally unfair to apply the new rule retroactively to reimbursement disputes such as this, which arose prior to the date of this decision.  Similarly, because this decision is being rendered late in the 2017-2018 school year and school districts need time to adjust their billing and reimbursement practices in light of the new rule, it would not be appropriate to apply the new rule to claims for reimbursement for services rendered during the current school year even where the dispute arises after the date of this decision.  Accordingly, the new rule shall apply only to those cases involving reimbursement for the 2018-2019 school year and beyond.

Turning to the merits, pursuant to Education Law §912, petitioner is obligated to provide the same health and welfare services and facilities for nonresident students who attend nonpublic school in its district that it provides to resident students who attend public school in the district. Further, petitioner is entitled to charge respondent the cost of providing such services to residents of respondent’s district.  The proper charge to the district of origin for each student is the total cost of all health and welfare services divided by the total number of students, public and nonpublic (Appeal of the Board of Education, Greenburgh Central School District No. 7, 33 Ed Dept Rep 81, Decision No. 12,983; Matter of the Board of Education, City School District of the City of New Rochelle, 23 id. 355, Decision No. 11,246; Matter of the Board of Education, Elmsford Union Free School District, 22 id. 151, Decision No. 10,913).

Education Law §912, however, does not address the type of documentation that is required to obtain reimbursement.  Instead, Section 912 calls for a written contract between the district of residence and the district of attendance:

Where children residing in one school district attend a school other than public located in another school district, the school authorities of the district of residence shall contract with the school authorities of the district where such nonpublic school is located, for the provision of such health and welfare services and facilities to such children by the school district where such nonpublic school is located, for a consideration to be agreed upon between the school authorities of such districts, subject to the approval of the qualified voters of the district of residence when required under the provisions of this chapter. Every such contract shall be in writing and in the form prescribed by the commissioner, and before such contract is executed the same shall be submitted for approval to the superintendent of schools having jurisdiction over such district of residence and such contract shall not become effective until approved by such superintendent.

In this case, there is no indication in the record that the parties had a written contract regarding reimbursement.  However, the Commissioner has repeatedly held that even if the technical requirements of §912 have not been complied with and no contract has been entered into, neither board of education may be absolved of its statutory duty to provide health services or to reimburse for such services, as applicable (Matter of the Board of Education, City School Dist. of the City of New Rochelle, 23 Ed Dept Rep 355, Decision No. 11,246; Matter of the Board of Education, City School Dist. of the City of Plattsburgh, 10 id. 228, Decision No. 8,287; Matter of Union Free School District No. 10 of Southold, 1 id. 197, Decision No. 6,546).

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 P.C. and K.C., 57 Ed Dept Rep, Decision No. 17,337; Appeal of Aversa, 48 id. 523, Decision No. 15,936; Appeal of Hansen, 48 id. 354, Decision No. 15,884).

Based on the evidence in the record, I find that respondent is responsible for the cost of services submitted by petitioner for the 2010-2011, 2011-2012 and 2013-2014 school years.  This appeal is materially indistinguishable from Appeal of the City School District of the City of New Rochelle (35 Ed Dept Rep 198, Decision No. 13,514).  In that appeal, respondent, as the district of residence, refused to reimburse the district of location for health services because certain parental affirmation of residence forms were either unsigned or contained the signature of a school official instead of a parent.  The Commissioner held that respondent was estopped from objecting to such deficiencies because respondent had reimbursed the district of location for several students whose parental affirmation forms had similar deficiencies; for example, those which were undated, contained no school year ending date, listed an incorrect school year ending date, or were not subscribed before a school official.  The Commissioner held that respondent’s selective reimbursement was arbitrary and capricious.

The same reasoning applies in the instant appeal.  For each of the school years identified above, petitioner submitted a request for reimbursement supported by parental affirmation of residence forms which appear to have been generated by respondent to facilitate requests for reimbursement for health services.  Upon receipt of petitioner’s requests, respondent reimbursed petitioner for some but not all students based upon its claimed inability to verify the students’ residences.  However, petitioner asserts that the exact same information was provided for each student: a completed parental affirmation of residence form where a parent swore to his or her residency within respondent’s district.  The record further demonstrates that, in some instances, respondent initially denied certain requests but later granted these requests even though petitioner had submitted no new proof.  Based on the above, I find that, for each school year for which petitioner has proven that parental affirmation of residence forms were submitted for the disputed students, respondent acted arbitrarily in granting some requests but denying others based upon the exact same proof (Appeal of the City School District of the City of New Rochelle, 35 Ed Dept Rep 198, Decision No. 13,514).

Respondent nevertheless contends that its determination was rational because it determined the students’ residency by consulting its ATS database and issued reimbursement for those students whom the database identified as district residents.  However, in its verified answer, respondent admits that the ATS system is limited insofar as it only includes students with “some prior connection to the New York City Public Schools—either as a student ... or having received some service from [respondent].”  The students for whom petitioner seeks reimbursement attended nonpublic schools located within petitioner’s district and, thus, may not have had a “prior connection” with respondent’s district.  Moreover, the parental affirmation of residence form at issue in this appeal is a form drafted by respondent and provided to districts of location for use in verifying residency.  The form makes no mention of any requirement for additional documentation such as a utility bill.  In Appeal of the City School District of the City of New Rochelle (35 Ed Dept Rep 198, Decision No. 13,514), respondent argued that the completed parental affirmations of residence represent a reliable verification of the residence of each student, which conflicts with respondent’s position in this appeal that additional proof of residency is required where a student is not included in the ATS database or where a student is listed in the ATS database as having an address located outside of respondent’s district.  Respondent has not provided sufficient proof that any of the students for whom it denied reimbursement are not district residents.  Therefore, on this record, I do not find the information in the ATS database sufficient to overcome the evidentiary weight of the parental affirmation of residence forms, which constituted prima facie evidence of residency.  Accordingly, it was not reasonable for respondent to require petitioner to produce “additional proof of New York City residence ...” as a precondition for reimbursement.

I acknowledge that respondent has submitted spreadsheets which respondent asserts reflect entries in the ATS database suggesting that certain families do not reside within respondent’s district; for example, one such entry reads: “[r]esides at Queens since 10/15/04.”  However, I do not find such information dispositive.  First, respondent has not explained how or when it obtained this information, or how it generally obtains such information.  Moreover, there is no basis in the record to determine whether any of the mailing addresses or information referenced in the notations actually refer to either within or outside respondent’s jurisdiction.  While I note that there may be circumstances where a district could request additional information concerning a student’s residency notwithstanding the execution of a parental affirmation, respondent has not shown on this record how or when it obtained its allegedly contradictory information and, thus, under these circumstances was not justified in doing so.

However, I cannot find that respondent is responsible for the cost of the disputed students for the 2009-2010 and 2012-2013 school years, and for one of the three students for whom respondent claims it “needs” parental affirmation forms for the 2013-2014 school year as petitioner failed to prove that it submitted copies of the parental affirmation forms for those years.  Although it would be consistent with petitioner’s demonstrated practice of submitting completed parental affirmation forms, on this record petitioner has only established that it submitted lists of student names and addresses to respondent for the 2009-2010 and 2012-2013 school years.  Petitioner has admitted that it did not retain copies of parental affirmation forms allegedly submitted to respondent for these two school years.  With respect to the three students for whom respondent claims it “needs” parental affirmation forms for the 2013-2014 school year, the record contains copies of only 62 parental affirmation forms, each of which, though redacted, appear to apply to a single student (e.g., 59 of 62 contain a single birth date; three contain no birth date).  Respondent reasonably required submission of a parental affirmation for such student, and submission of a mere list of student names and addresses does not constitute proof of residency.  Thus, I find on this record that petitioner failed to meet its burden of proving that the students for whom it seeks reimbursement for the 2009-2010 and 2012-2013 school years resided within respondent’s district and the two students discussed above for whom reimbursement is sought for the 2013-2014 school year.

THE APPEAL IS SUSTAINED TO THE EXTENT INDICATED.

IT IS ORDERED that respondent pay to petitioner the remaining sums owed for the 2010-2011, 2011-2012, and 2013-2014 school years, less any amount which may have been paid prior to the date of this decision, in compensation for health services rendered to residents of respondent’s district in accordance with this decision.

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