The New York State Comptroller is vested with the exclusive authority to resolve applications for retirement benefits and the "determination must be upheld if [the] interpretation of the controlling retirement statute is reasonable and the underlying factual findings are supported by substantial evidence".
The New York State Retirement and Social Security Law provides a member's retirement benefit is based upon his or her final average salary, i.e., the average salary earned by such member during any three consecutive years which provide the highest average salary" and, with respect to the payment of overtime, General Municipal Law §90 authorizes governing boards to provide for the payment of overtime compensation to public officers and public employees who "are required to work in excess of their regularly established hours of employment" and mandates that the payments be considered as salary "for any of the purposes of any pension or retirement system."
As this language must be strictly construed in view "of the constitutional provision against the expenditure of public funds absent express statutory authority", "overtime payments are not duly authorized or considered as salary within the meaning of General Municipal Law §90 unless paid pursuant to 'an overtime plan setting forth in detail the terms, conditions and remuneration for such employment'".
In this instance the Appellate Division annulled so much of the Comptroller's calculation as excluded certain holiday pay from the calculation of petitioner's final average salary and granted the petitioner's petition to that extent and matter remitted to the Comptroller for further proceedings "not inconsistent with this Court's decision" and, "as so modified, confirmed" the Comptroller's calculation of the petitioner's pension benefit.
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Matter of Gallante v DiNapoli |
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2024 NY Slip Op 03370 |
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Decided on |
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Appellate Division, Third Department |
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Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
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This opinion is uncorrected and subject to revision before publication in the Official Reports. |
Decided and Entered:
CV-23-1408
[*1]In the Matter of Tory Gallante, Petitioner,
v
Thomas P. DiNapoli, as State Comptroller, et al., Respondents.
Calendar Date:
Before:Egan Jr., J.P., Aarons, Fisher, McShan
and Mackey, JJ.
Gleason, Dunn, Walsh & O'Shea,
Letitia James, Attorney General,
Aarons, J.
Proceeding pursuant to CPLR article 78 (transferred to this Court
by order of the Supreme Court, entered in Albany County) to review a
determination of respondent Comptroller denying petitioner's application for
recalculation of his final average salary.
After a 30-year career as a firefighter, petitioner retired as
Chief of the Arlington Fire District in March 2019 and began collecting
retirement benefits. In 2020, the
The Comptroller is vested with the exclusive authority to resolve
applications for retirement benefits and the "determination must be upheld
if [the] interpretation of the controlling retirement statute is reasonable and
the underlying factual findings are supported by substantial evidence" (Matter
of Schwartz v McCall, 300 AD2d 887, 888 [3d Dept 2002] [internal citations
omitted]; accord Matter of O'Brien v DiNapoli, 116 AD3d 1124,
1125 [3d Dept 2014]). "Consistent with the provisions of the Retirement
and Social Security Law, a member's retirement benefit is based upon his or her
final average salary, i.e., the average salary earned by such member during any
three consecutive years which provide the highest average salary" (Matter of Glozek v DiNapoli, 221 AD3d 1231, 1233 [3d
Dept 2023] [internal quotation marks, ellipsis and citations omitted]; see Retirement
and Social Security Law § 2 [9]).
Regarding the payment of overtime, General Municipal Law § 90
authorizes governing boards to provide for the payment of overtime compensation
to public officers and public employees who "are required to work in
excess of their regularly established hours of employment" and mandates
that the payments be considered as salary "for any of the purposes of any
pension or retirement system." This language must be strictly construed in
view "of the constitutional provision against the expenditure of public
funds absent express statutory authority" (Conrad v Regan, 175 AD2d
629, 629-630 [4th Dept 1991], lv denied 78 NY2d 860
[1991]; see NY Const, art VIII, §1; Matter of Murray v
Levitt, 47 AD2d 267, 269 [3d Dept 1975], lv denied 37 NY2d
707 [1975]). Consequently, "overtime [*2]payments
are not duly authorized or considered as salary within the meaning of General
Municipal Law § 90 unless paid pursuant to 'an overtime plan setting forth in
detail the terms, conditions and remuneration for such employment' " (Matter
of Shames v Regan, 132 AD2d 743, 744 [3d Dept 1987] [emphasis omitted],
quoting Matter of Murray v Levitt, 47 AD2d at 269; see
Matter of Mowry v New York State Employees' Retirement Sys., 54 AD2d 1062,
1063 [3d Dept 1976]).
Petitioner first contends that the Comptroller's interpretation of
General Municipal Law § 90 is unreasonable. We disagree. At the hearing, the
assistant director of the Retirement System's Benefit Calculation and
Disbursements Bureau explained that, under General Municipal Law § 90, salary
may only include overtime payments that are part of a comprehensive written
overtime plan. To determine whether petitioner's employment agreements with the
Arlington Fire District Board of Fire Commissioners met the requirements of
such a plan, the Retirement System considered five factors: (1) the amount of
compensation to be paid; (2) whether there is a cap on the compensation; (3)
whether the plan provides when and how the payments are made; (4) whether
approval is required prior to the overtime being performed; and (5) whether the
plan provides that the pay is for work performed beyond the regular workday. In
our view, these factors rationally correspond to statutory language authorizing
overtime for employees who "are required to work in
excess of their regularly established hours of
employment" at either their regular rate of pay or some other rate set by
the governing board (General Municipal Law § 90 [emphasis added]; see
Matter of Bascom v McCall, 221 AD2d 879, 880 [3d Dept 1995]; Conrad
v Regan, 175 AD2d at 629-630; Matter of Shames v Regan, 132
AD2d at 745).
Next, and contrary to petitioner's view, the Comptroller
rationally excluded petitioner's overtime payments because the employment
agreements (i) did not prescribe when and how overtime would be worked, (ii)
did not identify petitioner's regularly scheduled hours of employment, and
(iii) did not indicate whether prior approval was required for the performance
of overtime work. The agreements established that petitioner's "[w]orking
hours will be 40 hours per week on a five day a week basis." Although
"[t]he typical work week is Monday through Friday," petitioner had
discretion to vary his weekly schedule "for the best use to fit the
District's needs." Further, neither the agreements nor the Board's eight-hour
workday resolution specified which hours of the day petitioner was required to
work. Taken together, the Comptroller rationally concluded that petitioner did
not have "regularly established hours" within the meaning of General
Municipal Law § 90.
As to overtime requirements, the agreements specified that any
work in excess of 40 hours per week would be paid with compensatory time.
According to the record and representations at oral [*3]argument, compensatory time was generally calculated at petitioner's
hourly rate of pay. Petitioner testified that he earned compensatory time for
off-hours meetings and non-emergency work. Emergency call-back hours — time
spent fighting fires outside of the regular workday — were compensated at time
and a half pay. Although these provisions authorized petitioner to work
overtime, they did not specify any terms or conditions that would require him
to do so (see General Municipal Law § 90; Conrad v Regan,
175 AD2d at 629-630). Given the absence of a provision for prior approval — a
finding that petitioner does not dispute — the Comptroller appropriately found
that the agreements do not cover when or how petitioner worked overtime.[FN1] In
sum, because the employment agreements appear to have given petitioner a
"free hand in determining when and for how long [he] would work" (Matter
of Murray v Levitt, 47 AD2d at 269), the Comptroller's determination
excluding petitioner's overtime payments from his final average salary is
reasonable, supported by substantial evidence and will not be disturbed (see
Matter of Shames v Regan, 132 AD2d at 745; Matter of Mowry v New
York State Employees' Retirement Sys., 54 AD2d at 1063).
Petitioner also challenges the exclusion of the increased
compensation paid to him in 2019 for staff development from his final average
salary. "Pursuant to the Retirement and Social Security Law, the salary
base used to compute retirement benefits shall not include . . . compensation
paid in anticipation of retirement" (Matter of Franks v DiNapoli, 53 AD3d 897, 898 [3d
Dept 2008] [internal quotation marks and citation omitted]; see Retirement
and Social Security Law § 431 [3]; Matter of Smith v DiNapoli, 167 AD3d 1208, 1209-1210
[3d Dept 2018]). "In determining what constitutes . . . compensation paid
in anticipation of retirement, we must look to the substance of the transaction
and not to what the parties may label it" (Matter of Green v Regan,
103 AD2d 878, 878-879 [3d Dept 1984]; see Matter of Smith v DiNapoli,
167 AD3d at 1210; Matter of Chichester v DiNapoli, 108 AD3d 924, 925
[3d Dept 2013]). The record reflects that petitioner informed the Board in 2018
that he was planning on retiring. By stipulation entered into in January 2019,
the Board increased petitioner's hourly rate of pay by $15 effective
Finally, the Retirement System concedes, and we agree, that the
calculation of petitioner's final average salary improperly failed to take into
account all 144 hours of his earned holiday pay. Accordingly, the matter must
be remitted for a recalculation of petitioner's final average salary that
includes 144 hours of holiday pay. Petitioner's remaining contentions, to the
extent not specifically addressed, have been examined and found to be without
merit.
Egan Jr., J.P., Fisher, McShan and Mackey, JJ., concur.
ADJUDGED that the determination is modified, without costs, by
annulling so much thereof as excluded certain holiday pay from the calculation
of petitioner's final average salary; petition granted to that extent and
matter remitted to respondent Comptroller for further proceedings not
inconsistent with this Court's decision; and, as so modified, confirmed.
Footnotes
Footnote 1: Petitioner testified that, under the
District's time tracking system, he would fill out a form indicating the
overtime he had worked on a given day either immediately after completing the
work or the day after. According to petitioner, the Board had the option of
reviewing payroll records at their twice-monthly meetings after the payroll
process was complete. In other words, this system "does not set out any
procedure for the regulation of overtime" worked by petitioner (Matter of Shames v Regan, 132 AD2d at 745), and
therefore does not affect our conclusion.