Opinion
No. 4090–14.
12-19-2014
In the Matter of the Application of The WESTCHESTER LIBRARY SYSTEM and The Mount Vernon Public Library as Central Library to The Westchester Library System, Petitioner, v. John B. KING, Jr., Commissioner of Education of the State of New York; Elizabeth R. Berlin, Executive Deputy Commissioner; The State Education Department; The University of the State of New York and The State of New York, Respondents.
O'Connell & Riley, Esqs., by James K. Riley, Esq., Pearl River, Attorneys for Petitioners. Eric T. Schneiderman, Attorney General of the State of New York, by Melissa A. Latino, Assistant Attorney General, of Counsel, Albany, Attorney for Respondents.
O'Connell & Riley, Esqs., by James K. Riley, Esq., Pearl River, Attorneys for Petitioners.
Eric T. Schneiderman, Attorney General of the State of New York, by Melissa A. Latino, Assistant Attorney General, of Counsel, Albany, Attorney for Respondents.
Opinion
DAVID A. WEINSTEIN, J.
By petition brought under Article 78 of the CPLR, petitioners the Westchester Library System (“WLS” or “the System”) and the Mount Vernon Public Library (“MVPL” or “the Library”) seek to annul a decision by respondent Elizabeth R. Berlin, Executive Deputy Commissioner of respondent State Education Department (“SED”), which reduced state library aid by 25%. The petition also names as respondents State Commissioner of Education John B. King, Jr., and the State of New York, and is supported by the affirmation of counsel.
Respondents have filed an answer and supporting memorandum of law, and the affidavit of Bernard Margolis, the State Librarian and Assistant Commissioner for Libraries at SED. They argue that the petition is untimely, barred by the doctrines of estoppel and laches and fails to state a claim.
The dispute underlying the petition arises out of SED's determination that the City of Mount Vernon (the “City” or “Mount Vernon”) failed to meet the “maintenance of effort requirements” of Education Law § 272, when the City reduced funding for the MVPL by over 5% from Fiscal Year 2010 to 2011.The provision of State aid to libraries is governed by Education Law §§ 272 and 273. Section 273 entitles a library system “providing service under an approved plan during a calendar year” to receive state aid pursuant to a formula set forth in that statute. Such aid is subject, however, to the terms of section 272(1)(j)(2), which provides in relevant part:
“In the event that the total sum raised by local taxation, exclusive of the sum raised for capital expenditures, for the support of a central library of a public library system in a twelve month period, is less than ninety-five per centum of the average of the amounts raised for such purposes by local taxation for the two preceding twelve month periods, the state aid to which such library system would otherwise be entitled for the development of its central library shall be reduced by twenty-five per centum. Upon receipt of annual central library activity reports satisfactory to the commissioner, the commissioner shall determine the amount of any underpayment or overpayments related to maintenance of effort and shall apply such adjustment to the next annual payment due such library system....”
These requirements may be waived for a two-year period if the Commissioner of Education determines that their application would “result in excessive hardship for the public library system or central library brought about by an extraordinary change in a local sponsor's economic condition, loss by a local sponsor of state aid to local governments provided under section fifty-four of the state finance law, or by a natural disaster” (Educ. Law § 272[1][j] [3] ).
The submissions before me provide the following account of the circumstances underlying this petition, which is not in dispute in regard to the pertinent facts:
The WLS operates through 38 libraries in Westchester County, and the MVPL has operated as its Central Library or co-Central Library (Margolis Aff. ¶ 2). Pursuant to a regulation of the Board of Regents (8 NYCRR § 11.4 ), the WLS submits an annual report to the SED on March 1 of every year. According to Margolis, the Board reviews such reports to determine compliance with statutory maintenance of effort requirements (id. ¶ 9). Those annual reports indicated that while the City allocated to the MVPL $4,140,598 in 2009 and $4,218,844 in 2010, it reduced that allocation to $3,361,755 for 2011 (see id. ¶ 21 & Ex. B).
By letter dated January 22, 2013, Margolis informed the executive director of the WLS that the Library had violated the requirements of section 272(l)(j)(2), triggering a 25% cut in aid (see id . ¶ 23). According to Margolis, the letter also advised the System that it could seek a waiver pursuant to section 272(1)(j)(3) (id. ).
The petition appears to indicate that the letter was “actually” sent on January 22, 2014 (Pet.¶ 12). That correction itself seems incorrect, since the application for a waiver of that decision (appended to the petition) is dated April 22, 2013, and is supported by an affidavit dated February 25, 2013 (Pet.Ex.A). Although the January 22 letter would appear central to the issues presented on this proceeding, neither party has included a copy in its submission.
The District submitted such a waiver request on April 22, 2013 (see Pet. Ex. A). The stated basis for the waiver was “the extraordinarily adverse change[s] in the economic condition of the City and the consequent local tax levy reductions to the Mount Vernon Public Library, Central Library of the Westchester Library System, for City fiscal years 2010 and 2011” (id. ). Further, it said the MVPL and other libraries in the System would suffer “excessive hardship” if the aid would be cut (id. ).
The waiver application was supported by the affidavit of Thomas Rajala, First Deputy Comptroller of the City of Mount Vernon. Rajala listed the total revenues for 2011 and 2012 ($39 and 40.7 million respectively) (id. ). He then attached a document delineating the 2013 budget, and noted that discretionary spending was reduced due to collectively bargained wage increases; “nearly all Departments experienced cuts in appropriations for 2013 vs.2012”; and the outlook for the 2014 budget “will be extremely difficult” (Rajala Aff. ¶ 3–4 in Pet. Ex. A). Data on appropriations dating back to 2009 was also appended to the affidavit.
On April 9, 2014, SED denied WLS' waiver request in a letter by respondent Berlin (see Pet. Ex. A). The letter notes that the System had described the hardship that would be suffered as a result of the spending cut, the statute requires that such hardship was brought about by an “extraordinary change” of the sort set forth therein, and the System had failed to point to such a change (id. ). Specifically, Berlin stated that the Rajala Affidavit failed to establish an extraordinary change in Mount Vernon's financial condition in 2011 and 2012. She found, in particular, that the affidavit showed a reduction in library appropriations, not in the City's revenue; the reductions were “not consistent across all departments and agencies”; and such reductions were not linked to a change in the City's economic condition, as opposed to a decision to reduce spending or taxes (id. ).
In their current submissions, respondents cite several other problems with Rajala's affidavit. They note that Rajala's representations essentially concerned revenues and expenditures in 2012, 2013, and 2014–not 2011, the year at issue (Resp. Mem. of Law at 8).
On July 31, 2014, WLS appealed Berlin's decision administratively to respondent Commissioner King (Pet.Ex.D). The System argued, for the first time, that SED's determination that the MVPL had failed to meet the statutory maintenance of effort requirement was based on an “error of law” (id. at 2). Specifically, petitioners contended that the SED had misread the governing statute as requiring a reduction in aid whenever there was a five per cent cut in the City's appropriation for the library from one year to the next. Instead, they argued, it was a five per cent reduction in Mount Vernon's overall tax revenue that requires such a reduction (id. ). In petitioners' words: “no reduction in State aid is permitted where there was no reduction beyond allowable amounts in the taxes actually received by the City of Mount Vernon; instead there was only a modification in the allocation of those tax monies after they have been received and this would not support reduction in State aid under the statute” (Pet. Ex. D at 3).
The appeal posited that this alleged misreading of the law was due to the unique circumstances of the MVPL. Specifically, the “vast majority” of libraries in New York State are run by independent districts, and thus a reduction in tax revenues ties directly to a cut in library funding (id. at 4). But here, the library is funded directly from the City's tax revenues, and therefore (according to petitioners) the language of the statute requires that SED find a five per cent reduction in the City's tax revenue, not in library appropriations, to support the imposition of a penalty by SED (id. ).
Finally, the appeal argued, in regard to the denial of the waiver request, that the libraries in the WLS had suffered significantly as a result of the cut in state aid. It listed a host of positions that cannot be filled, and services that cannot be provided, due to the loss of funds (id. at 4).
Petitioners characterized their appeal as challenging Berlin's April 9, 2014 letter (see id. at 2 [WLS and MVPL “respectfully challenge ... the administrative determination as rendered in the April 9, 2014 letter of Ms. Berlin”] ). As respondents now point out, however, Berlin's letter addressed only the WLS' waiver request, and said nothing about the determination that the Library had violated the maintenance of effort provisions in the first place, since that determination had been made in January of the prior year, and there is no indication in the record that petitioners had argued that the earlier ruling was legally erroneous until their appeal to the SED Commissioner.
There is no reference in the record to any decision by the Commissioner on the administrative appeal, and on August 8, this petition followed. In it, petitioners reiterate the argument from their appeal that SED misconstrued section 272(1)(j)(2) by cutting aid based on the drop in appropriations for the Library, rather than the change in the City's overall tax revenue (see Pet. ¶ 22). Although the petition addresses the April 9 letter and recounts the hardship the Westchester libraries have suffered from the loss of aid (see Pet. ¶ 34), it challenges the denial of the waiver only in a conclusory fashion,. Specifically, it states that there were “extraordinary economic changes that justified the Waivers for both years in issue ,” without specifying what those changes were (see Pet. ¶ 17).
Respondents' submissions make several arguments in opposition to the petition. First, they assert that it is untimely. In particular, they contend that the decision challenged in the petition—the reduction in state aid—was issued on January 22, 2013, and the petition was not filed within four months thereof (Resp. Mem. of Law at 15–19). As to petitioners' later application for a waiver, respondents maintain that such effort at discretionary relief did not extend the time to bring a court challenge to the initial ruling (id. at 16). Finally respondents contest petitioners' reading of section 272(1)(j)(2) as contrary to the statutory language and purpose (id. at 10–13).
Discussion
I. Statute of Limitations
An article 78 proceeding must be commenced “within four months after the determination to be reviewed becomes final and binding upon the petitioner” (CPLR 217[1] ).
A determination becomes final and binding, and the applicable limitations period starts to run, “when the administrative action has its impact upon a party and it is clear that the party is aggrieved thereby” (Matter of Hunt Bros. Contrs. v. Glennon, 214 A.D.2d 817, 819 [3d Dept 1995] ).
In this case, respondents argue that the limitations clock started to tick on January 22, 2013, when SED notified petitioners that their funding would be cut. They assert that WLS' subsequent application for a waiver was akin to an application for rehearing or other discretionary reconsideration, which does not extend the limitations period (see e.g Matter of Miller v. Ambach, 124 A.D.2d 882, 883 [3d Dept 1986] ; Matter of Lavin v. Lawrence, 54 AD3d 412, 412 [2d Dept 2008] ).
As noted supra fn 1, petitioners appear to believe that this date is incorrect, and that the letter was issued January 22, 2014. Since the petition would be untimely from that date as well, any differences on this question are not material.
The problem with respondents' argument is this: it is their burden to prove the affirmative defense of the statute of limitations (Matter of Richmond Med. Ctr. v. Daines, 101 AD3d 1434, 1435 [3d Dept 2012] ; Matter of Jackson v. Fischer, 67 AD3d 1207, 1208 [3d Dept 2009] ). They assert, however, that the limitations period should run from the issuance of a letter that they do not provide, and which is not in the record before me. It is unclear what that letter said in regard to petitioners' right to ask for a waiver (except that it advised petitioners they could seek one), or whether that gave any indication that the proceeding was not yet concluded. The limitations period does not commence when “the agency has created the impression that the determination, albeit issued, was intended to be nonconclusive” (see Matter of Edmead v. McGuire, 67 N.Y.2d 714 [1986] ). Without having the determination at issue before me, I cannot decide whether or not that occurred here.
In short, I find that respondents have not met their burden of proving this defense (see Matter of Carriero v. Town Bd. of Town of Stillwater, 41 AD3d 1011, 1012 [3d Dept 2007] [respondents failed to meet burden that petition was time-barred where, inter alia, they did not submit letter relevant to question of timeliness] ). I proceed then, to the merits of the petition.
The same logic precludes me from dismissing the petition under the equitable doctrine of laches (see Simcuski v. Saeli, 44 N.Y.2d 442, 450 [1978] [laches to be “pleaded and proved” by the party asserting it] ).
II. The Maintenance of Effort Provisions
As stated above, Educ. Law § 702(1)(j)(2) provides for the imposition of a 25% penalty when “the total sum raised by local taxation ... for the support of a central library of a public library system in a twelve month period, is less than ninety-five per centum of the average of the amounts raised for such purposes by local taxation for the two preceding twelve month periods.” The crux of the dispute before me concerns the meaning of this phrase. Petitioners contend that this refers to a reduction in the overall amount of taxation collected by the municipality in this case; respondents assert that it concerns only a drop in the funds allocated for libraries.
Given SED's role in administering this statute, I may only reject its interpretation if it is “irrational or unreasonable” (see Matter of Lighthouse Pointe Prop. Assoc. LLC v. New York State Dept. of Envtl. Conservation, 14 NY3d 161, 176 [2010] ). But even without this deferential standard, I could not embrace petitioners' construction, which is simply without support in the statutory language or purpose.
On its face, the statute refers to the funds raised by taxes “for the support of a local library. ” There is no way to read this language as referring to general tax revenues, including those for such unrelated matters as police, fire protection or government administration. The fact that the MVPL is funded differently from other libraries does not warrant a different outcome. The relevant figure is the amount of taxes used to “support” that library. In this case, that refers to those funds appropriated for that purpose by the Mount Vernon City Council.
That conclusion is supported by such evidence of legislative intent as I have been able to locate. When the Legislature amended the statute to add the waiver provision, in Chapter 625 of the Laws of 1991, various submissions discussed the maintenance of effort provision. With unanimity, all those commenting on the legislation understood that the statute required localities to maintain funding for libraries, not their overall tax revenue (see Memorandum of SED [waiver would “prevent library systems and central libraries from losing state aid if funding for local libraries is substantially reduced ”]; Letter of Assembly sponsor [“Current law ... requires a reduction in State aid if local support of the participating libraries in a public library system falls below 95% of the average of the previous two years”]; Letter of Senate sponsor [“Existing § 272... requires SED to cut State aid to public library systems by twenty-five percent if the aggregate local funds for member libraries fall below ninety-five percent of the local funding for the previous two years”]; Amended Legislative Memorandum in Support [same] ).
The State has submitted evidence from 2014 legislation regarding the purpose of the waiver provision. Neither party has addressed the legislative history of the language regarding the 25% reduction in aid. The memoranda cited below are contained in the bill jacket for Chapter 625.
Further, I find Margolis' representation that the requirement of this provision is intended in part to ensure “a local commitment to support public libraries” persuasive (Margolis Aff. ¶ 12). This is, after all, the standard goal of a “maintenance of effort” requirement —to ensure that an entity receiving aid from an outside source continue its prior level of service, and not simply use such support as a replacement for its own expenditures (see e.g. State of Washington v. U.S. Dept. of Educ., 905 F.2d 274, 276–277 [9th Cir1990] [discussing whether a “maintenance of effort” requirement should be implied in the statute, as it would prevent federal funds from “supplanting” state contribution]; St. Joseph's Hosp. Health Ctr. v. Department of Health of State of NY, 247 A.D.2d 136, 149 [4th Dept 1998] [upholding maintenance of effort regulations as “consistent with the concept of maintenance of effort,” whose purpose was to “discourage a hospital from shifting the burden of providing” certain services “to another hospital”] ).
This term is used in the statute (see Educ. Law § 272[1][j] [1] & [2 ] ).
Petitioners' construction would not advance this goal—or any other apparent policy objective connected to the State library system. It is unclear why the policy of providing state aid to libraries would be tied to the change in overall local tax revenues, regardless of whether such revenues were used to support libraries. By petitioners' reasoning, if the City were to keep its tax intake stable, while slashing budgets for the library in half, it would have fulfilled its part of the “maintenance of effort” bargain. It is unclear, and petitioner does not explain, why the State would conceivably have tied library assistance to such a condition.
Finally, to the extent the petition may be read to challenge SED's denial of a hardship waiver to WLS, petitioners present no grounds as to why this was improper, much less have they shown it was arbitrary and capricious. The WLS submission seeking such a waiver made no showing that the reduction in library aid was prompted by any change in the financial condition of the City, or any other “extraordinary” factor. Indeed, petitioners' argument is premised on the fact that tax revenues remained stable, while library budgets were cut. And while petitioners recount the significant hardship that they (and their users) have endured as a result of the reduction in State aid, that does not provide a basis for a waiver. Rather, the statute requires that the applicant must show that there would be “excessive hardship” stemming from certain external factors, such as natural disaster or the City's economic condition.
Whenever there is a reduction in State aid due to a library's failure to comply with maintenance of effort requirements, this means the library will have less to spend on staff and services. Since that would apply in every instance, such a showing alone does not constitute an “extraordinary” circumstance, as contemplated by the statute.
In view of the foregoing, the petitioners have not shown any grounds for the relief sought on their petition.
Accordingly, it is
ORDERED, that the petition is DENIED and DISMISSED.
This constitutes the judgment of the Court. The original judgment is returned to the attorney for respondent. A copy of the judgment and the supporting papers have been delivered to the County Clerk for placement in the file. The signing of this judgment, and delivery of a copy of the judgment shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions of that rule respecting filing, entry and notice of entry.
SO ORDERED AND ADJUDGED.
Papers Considered:
1.Verified Petition of The Westchester Library System and The Mount Vernon Public Library as the Central Library to the Westchester Library System, dated August 1, 2014, with exhibits A through E annexed thereto;
2.Respondents' Verified Answer dated September 26, 2014, with Memorandum of Law in Support of Motion to Dismiss and in Support of their Answer;
3.Affidavit in Response of Bernard Margolis to Respondent's [sic] Answer and Motion to Dismiss, dated September 26, 2014, with exhibits A through C annexed thereto; and
4.Petitioners' Combined Reply Affidavit of Fact and Law on behalf of petitioner, dated October 17, 2014.